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Sling TV, the new way to stream ESPN over the internet, explained

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Dish CEO Joe Clayton at today's announcement of Sling Television
Dish CEO Joe Clayton at today's announcement of Sling Television
The Verge

We're getting closer to the point where you can cancel your cable subscription and still continue to enjoy all your favorite cable TV shows. Today at the Consumer Electronic Show, the satellite TV company Dish announced the next step in that direction. Sling TV is a service that lets you watch cable TV channels over the internet.

Crucially, the Sling TV lineup includes ESPN, the nation's most popular cable channel and a must-have for sports fans. And unlike some other streaming services, you can sign up for it without getting a conventional cable subscription.

Read on for all the details on Dish's new internet streaming service.

What's Sling TV?

Sling TV is a new video streaming service from Dish. In the past, Dish has focused on delivering video content via satellite dishes, but the new service streams video over the internet instead.

Obviously, video streaming isn't a new concept. Companies like Netflix and YouTube have been doing it for years. What makes Sling different is that it's the first streaming service that feels like a cable television subscription.

You can use it to stream traditional cable channels like ESPN and CNN to your TV without signing up for a traditional cable subscription.

It's also dramatically cheaper than traditional cable. The service costs just $20 per month, with no contract. Dish says it will be available in the first quarter of 2015.

Do I need a Slingbox to watch Sling TV channels?

You can watch Sling TV with a Roku player. (The Verge)

Dish is a corporate cousin of Sling Media, the company behind the Slingbox, a set-top box that enables personal streaming of television content. But according to the Dish press release, the two services are "completely independent."

So you don't need a Slingbox to sign up for Sling TV. The service supports a wide range of streaming devices: Amazon Fire TV, Amazon Fire TV Stick, Google’s Nexus Player, select LG Smart TVs, Roku players, Roku TV models, select Samsung Smart TVs, Xbox One from Microsoft, iOS, Android, Mac, and PC. Notably, a Fire TV Stick costs just $40, so this service should be affordable to almost anyone.

Which channels can I get?

ESPN is among the channels available on Sling TV. (Jeff Siner/Charlotte Observer/MCT via Getty Images)

Sling TV is the closest thing you can get to traditional cable service delivered over the internet, but the lineup is still pretty limited. The lineup will include TNT, TBS, CNN, Food Network, HGTV, Cartoon Network, Adult Swim, the Disney Channel, ESPN, and ESPN2. For many sports fans who don't otherwise want to subscribe to cable, ESPN and ESPN2 might be enough of a draw all on their own.

However, you won't be able to get AMC, FX, or Comedy Central. Nor will you be able to get content from major broadcast TV networks like NBC or Fox. The companies behind these channels have prospered under the conventional cable industry structure, and so these companies are reluctant to rock the boat and potentially undermine their own business model.

And notably, you won't be able to pick and choose which channels you want to subscribe to. You get a bundle of basic channels for $20 per month, plus the option of adding additional bundles for an added fee. But you won't have the option to just sign up for ESPN.

Why is this service being offered by a satellite TV company?

(Scott Olson/Getty Images)

You might have expected a service like Sling TV to be offered by a Silicon Valley company like Google or Netflix, but Dish has a couple of advantages that makes it well-positioned to offer a compelling package of cable channels.

For one thing, unlike most Silicon Valley firms, Dish has years of experience negotiating with content providers for the rights to cable channels. Channels like CNN and ESPN have been broadcast on Dish's satellite network for years, and experience negotiating those deals probably helped Dish talk those companies into joining the Sling TV lineup.

At the same time, Sling TV is a blow against Dish's traditional rivals in the cable industry. Dish only holds around 13 percent of the pay TV market, small enough that it doesn't have too much reason to worry about cannibalizing its core satellite TV business. Most of the customers they attract will come from the local cable company, not Dish.

Dish also believes that Sling TV targets a different market than traditional satellite service. Sling TV is targeted at younger, more internet-savvy, and more cost-conscious consumers in their 20s and 30s. Dish is designed for older viewers who consume a lot of television content. Dish hopes to grow a big, new market in internet streaming without undermining demand for its satellite television service.

How scared should cable companies be?

So far, the cable industry has occupied an enviable position in the media ecosystem. While other 20th century distributors — record labels, newspapers, book stores, and so forth — have imploded, the cable industry has continued to generate handsome profits.

That's partly because, until now, no one has been able to offer heavy TV viewers a compelling alternative to a traditional cable subscription. You can get individual channels from HBO Go, and you can stream an impressive amount of content from Netflix and Amazon Prime. But if you wanted to see new TV shows when they came out or watch live sports, none of the internet-based services provided a serious alternative.

Sling TV isn't a full replacement for a conventional cable subscription, but it comes closer than any service that came before. The inclusion of ESPN will make the service particularly attractive to sports fans. So expect Sling TV to accelerate "cord cutting," the process where households cancel their cable TV subscriptions in favor of internet content from services like Netflix and (now) Sling TV.

However, the cable industry doesn't need to worry too much. Even after customers cancel their cable TV subscriptions, most of them are still getting their broadband service from their cable companies. So while cord-cutting isn't good for the cable industry's bottom line, it's not an existential threat, either. Even if internet-based streaming services totally destroy the traditional cable-television business, cable companies might get along just fine selling the bandwidth customers need to access online content.