DISH Network Upped To Hold On Strong Prospects Of Sling TV

On Jul 7, 2016, Zacks Investment Research upgraded DISH Network Corp. (NASDAQ:DISH) to a Zacks Rank #3 (Hold) from a Zacks Rank #4 (Sell). The company is focused on the expansion of its Internet TV service, Sling TV, ever since its core pay TV business started to suffer due to cord cutting.

Sling TV

DISH Network forayed into the Over-the-Top (OTT) video delivery market with the commercial launch of its Internet TV service – Sling TV – across the U.S. Unlike conventional cable TV, Sling TV does not require a contract or extra hardware installation. The service is supported by iOS, Android and Roku devices and is available at exceptionally low prices starting from $20 per month. The service allows access to top-rated TV channels such as ESPN and Disney Channel. Recently, DISH rolled out the Sling TV app for Apple Inc (NASDAQ:AAPL).’s Apple TV platform and added 20 channels of Viacom Inc.’s (NASDAQ:VIAB) network.

However, the company is bound to face challenges is the pending merger between Time Warner Cable Inc. (TO:TWC) and Charter Communications Inc. (NASDAQ:CHTR) goes through. The merged entity, with solid subscriber strength of almost 24 million, would attempt to throttle its network on running any third-party based video streaming app. This could hurt Sling TV’s prospects, going forward.

Digital Ad Market – A New Opportunity?

DISH strives to benefit from increased expenditure by broadcasting companies in the digital advertisement space. With the digital advertisement industry experiencing burgeoning demand of late, media companies have jumped on the bandwagon to provide data-driven target audience-based advertising. As this form of advertising gains popularity, DISH would benefit from by transmitting the content of these broadcasters. Notably, DISH offers both the pay-TV and Internet TV service, which should be particularly advantageous for a digital marketer.

Programming and Content Cost Woes

DISH Network’s top line may remain under pressure as the company failed to strike a deal with wireless operators to deploy a nationwide wireless network. This has also limited the geographical reach of the Sling TV service. At present, Sling TV is only viable in metropolitan cities where high-speed broadband is available. Moreover, DISH needs to upgrade the user interface of its Sling TV to incorporate more channels, which might put a downward pressure on its Average Revenue Per User (ARPU).