EchoStar’s $380 million purchase of Sling Media once again raises the question of whether a consumer TV-device company can exist as a standalone entity. History has not been kind to such companies trying to break out from the startup field. Akimbo anyone? TiVo has also certainly seen its share of ups and downs (mostly downs). Even the attempts of larger tech companies at combining TVs and computers, such as the Apple TV or Microsoft’s various efforts over the years, haven’t fared any better at gaining massive consumer acceptance. The consumer-electronics giants and cable companies simply dominate this market. Given that reality, selling to EchoStar may have been Sling Media’s best option.
Although the company does not disclose exact figures, a Sling Media spokesperson says the startup has sold “hundreds of thousands” of Slingboxes over the past couple years. So that could be anywhere between 200,000 Slingbox users (which would bring the purchase price to $1,900 per user) and 900,000 (which would come to a purchase price of $422 per user). (Ed. note: I fixed my initial bad math).
Still, that is not the math EchoStar used to justify the purchase. Because EchoStar, which was already a minority investor in the startup, did not buy Sling Media for its puny number of existing customers. It bought Sling Media for its place-shifting technology, which allows people to watch whatever is on their TV from a remote location on their laptop. EchoStar can now integrate that technology into its set-top boxes and has a better chance than Sling Media did to get the number of Slingbox users up well past a million. Another reason behind the deal may be to combine Sling Media with EchoStar’s other technology assets (set-top boxes, satellites), and split off the resulting, strengthened TV-technology group as a separate business, while dressing up its TV subscription service for a sale to AT&T. If that happens, then an independent EchoStar TV technology business would be free to sell place-shifting set-top boxes to rivals as well.
Just as the DVR did not take off until DirecTV and EchoStar started pushing the technology to their own customers, I would expect the same thing to happen with Slingboxes. But instead of EchoStar trying to design an inferior version of a Slingbox and push that on its TV subscribers, as it’s done with DVRs, at least this time it is starting out with the best technology up-front.
Never even heard of the company and they go for $380 million….crazy
Companies are getting purchased like it’s nothing
I think your math is off by about three zeros… That should be $422 or $1,900 per user. That’s a lot more reasonable considering those things sell for a hundred to a few hundred a piece.
Hey Eric, your last name is spelt wrong on Techcrunch’s about page.
-Andrew
I really hope you were hungover with math like that. Quite a difference between $1900 and $1,900,000.
Eric –
I hate to correct you on your first Techcrunch post, but I think your calculation of value per user is off. They paid between $422 and $1,900 per user. Not $422,000 – $1.9 Million per user…
Josh
*If* it is $422 per user then that sounds pretty good if you get a customer (consider cost of sales) + the slingbox (consider hardware + install)….
Excellent reporting. A huge improvement over previous TC postings, both in writing and journalism. Keep up the great work.
Not very surprising. I haven’t heard a single complaint from any slingbox owner, everyone loves them. If I travelled more I’d be tempted to get one.
Is it at all possible that they use the SlingBox as a subscription service, allowing someone to have one without any TV service to start? The box would be somewhere at an EchoStar server farm and it would serve the TV streaming to their customer, who doesn’t have a satellite dish or even a TV?
It makes sense as a subscription service more than it does as a purchase.
Well, I’m off to a good start. I can’t even divide correctly. Thanks for the instant fact-checking on my math. It is now fixed in the post above.
Great post Erik,
I own a Slingbox and use it with my Treo on the road. I don’t use it as much as I thought I would but it does come in handy when your in a different state and want to watch the local game. For all those that are unfamiliar with Slingbox you can also connect this to your Tivo/dvr and watch anything stored and recorded. You can also control the recording options exactly like the remote at home. Its a pretty nifty device that works really well.
I liked how this post has more of a story to it, it was a good read. I look forward to more.
Welcome Erick,
enjoyed your work at Business2.0 so hope for more of the same here. The quality shines
where do you think other TV timeshifting services come out in this? like Orb for example?
cheers
Can they come up with a video sharing website using their technology?, Would it even be legal to do so?.
If Microsoft couldn’t do this, nobody can!
http://fakestev...er.blogspot.com
Good post. I got a SlingBox a few months ago and it has been excellent…
This was a stupid purchase. What they bought was a bunch of engineers in India, a weak management team in the US, existing lawsuits, a user base that loves the product but doesn’t use it much and some pretty simple technology. What they didn’t get were the patents to the technology. Which is why Sling had not been bought out sooner. Trust me EVERYONE has looked at buying Sling at one time or another. This is a desperate act by E*
Only people who don’t watch sports or TV don’t know who Spingbox is. I thought Cisco would buy them for at least $500MM.
I bought my Slingbox to use while I am deployed in Afghanistan. It works great- when I can get the bandwidth to use it. I think it’s a great idea to keep in touch with what’s going on at home. I hope that this merger will make it a better product.