Sling TV's Lynch: Platform has fixed 'systemic' tech problems and has moved on to 'whack-a-mole'

Plagued early in its development by technical issues for highly watched events like NCAA Tournament basketball games and season premieres, Sling TV has overcome what CEO Roger Lynch called its "systemic" live-streaming issues.

"We don't have those issues anymore," he told investors Thursday during Dish Network's (NASDAQ: DISH) second-quarter earnings call. "They're more corner cases that we have to knock out. In certain situations, a customer is having some problem, and we have to find out the root cause and how we can work with our CDN partners to knock out anymore corner cases. So much of what we do now is more whack-a-mole rather than big systemic issues."

Lynch restated that the challenge for a live-streaming service like Sling TV is to overcome endemic technical problems associated with using the internet.

"If you were going to architect a network to deliver video, you wouldn't architect the internet the way it was architected," he said. "It wasn't architected for synchronous video delivery. And so a lot of effort goes into designing systems to counteract the way the internet was designed with its random discard of packets and things like that that happen in routers."

Dish reported huge subscriber losses of 281,000 users in the second quarter. Analysts estimate that Sling TV's growth slowed to around 50,000 subscribers. 

Dish Chairman and CEO Charlie Ergen suggested the "seasonality" of OTT services in general might have slowed growth for the platform in the second quarter.

"There is a seasonality, I think, we knew going in. And we're not shocked by it," Ergen said. "But there is a seasonality to an OTT product that's not there in linear because it's one of the great advantages of an OTT product. It's very easy to sign on or sign off a month at a time. So as people go on vacation. Until the Olympics start and football season starts up, there's probably not compelling content on in the summer. So you do have a seasonality to it that's maybe more exaggerated than we would see in linear TV where it's kind of a hassle to turn on and off."

Meanwhile, speaking on AT&T's upcoming launch of a rival IP-based service, DirecTV Now, Lynch remarked, "We obviously have always expected that we're going to see more competition. I've been a little surprised that it's taken this long for anyone to really launch. My expectation is that as new entrants enter this market, we're just going to see faster growth over the top. Obviously, it'll affect the market share that we have right now, but I don't expect that it's going to materially affect the growth of our business."

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