Launched six months ago in the UK, Sling Media’s ‘place-shifting’ devices have shaken up the TV value chain to such an extent that broadcasters, ISPs and mobile operators are all seeking deals with the firm.
They use a disruptive technology that allows people to watch TV content remotely from PCs, laptops or mobiles.
We asked Stuart Collingwood, the company’s VP of Europe, how mobile, web and IPTV developers can make sure they’re not left out of the action.
What’s the latest info on sales?
We’ve done very well. We don’t publish figures specifically, but in the States we sold over 100,000 units in the first six months.
How about the
We’ve not published any figures for the UK but it’s sold very well. We ran out of stock quite quickly, so we had to ship a whole load more in. It’s all being sold through DSG at the moment.
When will you be looking to expand your sales network?
We will be expanding it in due course but not now. We have a good relationship with Dixons, and they’re very pleased with sales – as are we. We just launched in Scandinavia with Viasat, the pay TV operator, and you will see more and more of those sorts of deals, as well as retail announcements.
What was your reaction when you first heard about the Slingbox, before you joined the firm? What did you think about how it would do and what impact it would have?
Interesting question. I thought it was a cool technology. Very cool. But I wanted to see how far the guys could take it.
It’s very easy to launch just one product and rely on that product for ever. But when I met with them, they had tremendous ideas for vision and roadmap. In the US last week, we launched the next generation of products, the triplets as we call them, which take the core principle of what we do, tailor it to different markets and extend it to different devices.
Ultimately, we’re thinking, in terms of applications, things that can be layered on top of the platform, and connectivity and integration with other devices, how do we make slinging part of people’s everyday life?
What sort of a reception have you had from broadcasters and the advertising community – are they worried?
They are all very interested, not least because it is a new technology. It’s about how they apply it and how it affects their risk profile.
It’s the same thing as five years ago with time-shifting – the TiVo – which is now familiar to many people, although it is still in only 1.5m homes in Sky’s case. This is a new technology, people haven’t heard of it.
Part of our challenge as a business is to raise awareness, and for the operators it is how to integrate it into their offering.
Most of them are looking at several steps – getting the Slingbox as an adjunct to their platform, selling it as a device or including it as some sort of monthly rental. But the natural extension of that is to put the technology into the set-top box - many of which have broadband connections that aren’t often used, so now it’s a reason to use them.
They all have different views about how commercial it is and how to price it, and how to make sure the rights of their content holders are properly aligned, but they are all interested – and that includes the mobile guys.
How close are you to completing the discussions?
We’re in discussions with most, if not all, of these companies in every country we have gone into.
Presumably, you’d tell content providers that there’s no point bothering to develop services specifically for broadband, 3G or DVB-H if your platform ends up going mainstream?
Good question. It’s a very current question that the operators are asking themselves.
There are various things to consider. You can’t deny the economic model associated with DVB-H, but there’s no spectrum.
Although that doesn’t apply to all countries, at the end of the day, you are aggregating channels for consumers on that platform. I already have what I want at home – all those channels – so why would I want someone else to aggregate a smaller set of channels for me on my mobile?
Also, quite often, I want to access content I’ve recorded on a hard disk – I want to watch what I want to watch now, not what’s on-air right now, and I can’t do that on DVB-H. Mobile operators have spent EU0.5bn building DVB-H infrastructure in this country in the hope they get spectrum, but by then the economics of broadband and 3G distribution may well make DVB-H look expensive.
So the operators are seeing they can start now with us. Potentially there are capacity problems with 3G networks, but potentially this technology can build and build in terms of uptake and they will have time to learn how to deal with them.
They would have to invest a little in the infrastructure, but they are saying ‘why should I build a DVB-H or DMB network when I can just use what I’ve got?’.
What about content providers? What opportunities are you offering to them, and what should they do to protect themselves?
Well, fundamentally, when they re-negotiate their rights agreements with the pay TV companies and broadband operators, they should provision for this so they get some upside.
Also, it reinforces the advertising model for many of the channels. When I’m travelling, or in the office, normally I don’t get to see the adverts that are local to my area.
But if I was watching through my Slingbox, I would be seeing an advert for a Jeep promotion at my local dealership at the weekend and I could go and buy one. That would normally be lost on me. So it reinforces the advertising model, and if you were a Nielsen measured home, you would be metered. So there’s lots of ways these guys can participate.
Wouldn’t they see your users as a distinct audience – travelling businesspeople, for example?
Yes, absolutely. But at the moment we are just relaying the video. There is stuff that could be done in the future potentially to exploit those segments. Also, it’s not just travelling businessmen – they are sports fans, people working from home, students.
Have you any plans to start serving your own ads, or interactivity?
As a business, we don’t just rely on hardware sales. There are plenty of opportunities to add additional services on top of the platform, once it’s launched.
What kind of services?
I don’t really want to go into them right now but if you look at the world of community and social networking and all that kind of stuff, there are definitely things that could be developed around the Sling platform. Stuff that makes use of the subscriber base and gels with the content partners that we work with.
We’ll also have long term agreements in place with the operators, so there will be a multi-faceted business.
How far off is that?
In terms of something being structured and managed by Sling, it’s some time off. At the moment we’re focused on selling the products.
Are UK broadband connections of good enough quality, and aren’t you putting more pressure on them?
DSL quality is clearly far more variable than cable. We recommend 256Kbps as a minimum.
Telewest cable, which I have at home, is generally pretty bomb-proof. Do I always get 10MBps downstream? No. Do I care? No. I still get 4Mbps, 5Mbps or 6Mbps. The upstream, I can monitor and I can tell you I consistently get 364Kbps. DSL is much more peaky and bursty.
It’s an interesting discussion we have with the broadband guys and they say ‘Oh God, we have enough applications loading up the network in the evenings’. But peak usage for us is the middle of the day – people logging on at work. When people are at home, they don’t use the broadband network – they use their wireless home network. You have to point out to them that people logging in remotely do it during the day, when the broadband networks aren’t loaded.
What effect do you expect on the system for selling TV rights geographically?
I’m not a rights specialist, but it undeniably calls into question the traditional model – and not just rights for geographical areas but also by platform. If you look at the recent Premiership rights auction, they sold the TV rights to Sky and Setanta, and sold the mobile rights separately – oops.
How has the Slingbox affected users’ viewing habits, generally?
Well, one thing is that people make use of their TV more when they have Sling because they have more chances to access it. But over 40% of the usage is in the home.
Some interesting data came out from Ofcom yesterday, which showed most Freeview boxes are now almost exclusively being bought for second or third rooms in the home. That shows people don’t necessarily want the full Sky or cable packages for other bedrooms in the house, but also shows an appetite for content away from the living room.
What other devices are you looking at?
Wherever you can embed the silicon and the software. We’re in laptops, PDAs, mobiles, we’ll be in Macs by the end of the year and set-tops sometime next year. There’s isn’t much you can’t fit it into.