Dish Network (NASDAQ:DISH) satellite service has often been distinguished by its unique hardware. Its Hopper whole-home DVR, for example, was the first set-top box to offer built-in commercial skipping functionality -- delighting consumers and enraging broadcasters.
But its newest service, Sling TV, offers no hardware at all. Aimed at cord-cutters, Sling TV streams a collection of channels over the Internet to subscribers via mobile devices, PCs, and set-top boxes.
That lack of first-party hardware could put Sling TV at the mercy of third-party hardware manufacturers, but in a recent phone interview, Sling TV CEO Roger Lynch told me why he is unconcerned.
Sling TV is currently accessible through a wide variety of devices, including the iPhone, iPad, most Android-powered smartphones and tablets, Windows PCs, and Macs. It is also available on many Roku devices and Amazon Fire TV, and it will be coming to the Nexus Player and Microsoft Xbox One in the near future.
Lynch said his company had strong partnerships with device manufacturers, particularly Roku, Amazon, and Microsoft. "We're working with our partners to get set-top boxes out to those who don't have them," he said.
Although Sling TV does not force subscribers to sign any contracts, those who are willing to pay in advance can receive a free, or discounted, set-top box. Subscribers who prepay for three months of Sling TV get discounts on Amazon and Roku players, and when Sling TV finally arrives on the Xbox One, Xbox Live members will get an entire month for free.
No PlayStation or Apple TV
Notably absent from the list of compatible devices, however, is the Apple TV and Sony PlayStation 4. Both are immensely popular, and their large install bases could limit the appeal of the Dish service.
Apple has now sold 25 million Apple TV units, many of them to American consumers. Roku has sold less than half that, while estimates for the Amazon Fire TV peg its sales in the single-digit millions.
Similarly, Microsoft has likely sold more than 10 million Xbox One consoles, but the PlayStation 4 is still more popular, outselling the Xbox One almost every month since both devices went on sale in November 2013.
Lynch offered no specifics as to why Sling TV is not offered on those platforms. While it might arrive one day, it is easy to imagine Apple and Sony rejecting Sling TV on competitive grounds.
Sony has an Internet-based cable service of its own coming: PlayStation Vue. Like Sling TV, PlayStation Vue streams an array of channels over the Internet to PlayStation owners. Sony's service will already be competing with traditional cable providers -- why would Sony willingly use its platform to support an Internet-based competitor?
The same could be true for Apple. Most recently, Peter Kafka at Re/code reported that Apple is in talks with content providers to create its own web TV service.
No plans for a set-top box
Netflix does not make its own hardware and neither does Hulu. Clearly, building a set-top box is not a necessary component to succeeding in this space. But by delivering a service that could compete directly with those offered by the hardware creators themselves, Dish could face some unique challenges.
"Our partner company, EchoStar, makes hardware, so it's something we could do, but we have no plans." Lynch said.
Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, and Netflix. The Motley Fool owns shares of Amazon.com, Apple, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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