Early results for new OTT service Sling TV have been "encouraging," but the product needs to improve in the challenging technological area of streaming live TV, according to Dish Network CEO Charlie Ergen.
Speaking to investors and media Monday during Dish's (NASDAQ: DISH) first-quarter earnings call, Ergen had to field very few questions about his company's loss of 134,000 subscribers during the period.
Instead, most of the inquiry concerned either Dish's recent AWS-3 spectrum auction haul, or Sling TV, which launched in early February.
Dish did not give up subscriber data on the service--a piece of data that was said, by one Dish rep, to be forthcoming. However, Ergen described Sling TV as becoming "more and more prevalent in our business model and the way we deploy capital."
Sling TV, he said, adds "a totally different dimension" to Dish's pay-TV business, which is now mature and declining, Ergen added. "The cost of churn is very low, and so is the cost of customer acquisition… The vast majority of people subscribing to Sling are people not paying for TV before. We're excited about where it's going to go. We think it will generate meaningful revenue for the company."
Discussing the challenges of streaming live TV, meanwhile, Ergen said, "We're not as good as we need to be technically," noting that improving the platform's infrastructure is taking priority over adding content and features to the service at this point.
Speaking alongside Ergen, Sling TV CEO Roger Lynch said pause, playback and the ability to watch episodes that are several days old remain the top requests among Sling's user base. "But the service already has a quite a bit of VOD available today," he added. "We need to do a better job of making it easily accessible to customers."
Lynch said that advertisers are interested in the platform, given that it's a service that enables targeted ads directed primarily at younger viewers. However, this is another area in which Sling's technology needs to advance.
Asked about skinny bundle products introduced by Verizon FiOS, Ergen said Verizon's bold handling--which has resulted in a lawsuit from Disney/ESPN--"may have been the way I handled it five years ago. I wouldn't do that today."
Ergen described a close working relationship with Sling TV's content partners, in which each side is working to tap what he described as incremental business.
Finally, asked about the upcoming conclusion of Dish's current program deal with Viacom, Ergen said he wouldn't discuss the matter publicly.
He then discussed the matter publicly, noting that Dish recently negotiated a rights deal with Viacom for movie channel Epix. He also said, however, that Viacom programming is "a bit more diluted" with distribution on SVOD hubs like Netflix. "We have to take that into consideration as we look at our own platform," he said.
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Earnings summary: Sizing up pay-TV earnings for the first quarter of 2015
Dish Network loses 134K subs in Q1, blames carriage disputes
Dish loses 63K subs in Q4 as carriage battles take their toll
Sling TV's Lynch: 'We don't think of people leaving the service as churn'