Dish Gets CBS on Satellite but No Streaming on Sling

Affiliates key to network's OTT strategy

CBS and Dish Network managed to hammer out a retransmission consent agreement and end a blackout of satellite subscribers, but there was no announcement that the network would be streaming on Sling, Dish’s skinny bundle service.

Neither company would comment, but sources familiar with the situation say CBS resisted being put on Sling just like in 2014, the last time the two companies negotiated a carriage deal. 

Related: CBS and Dish Reach Agreement to End Blackout 

The objection CBS has with Sling is that the streamer doesn’t want the signals of all CBS affiliates. In its streaming deals, including CBS’s own over-the-top, direct-to-consumer service CBS All Access, the network cuts the affiliates in for a piece of the pie. 

Not getting on Sling is not good for Dish, the first major virtual multichannel video programming distributor. In a recent report Barclays analyst Kannan Venkateshwar estimated that Sling is approaching 2 million subscribers, making it the largest of the vMVPDs. 

It is important to Dish that Sling add subscribers as cord-cutting and cord shaving reduce the number of traditional pay TV customers. 

“Sling's continued growth could give it enough scale in the next couple of years to drive operating leverage. We believe the addressable market of cord cutters could grow to 31million over the next decade, making this a sizable opportunity if Dish continues to grow Sling,” says Venkateshwar. “Strategically, this is also likely to add to Dish’s value for counterparties.” 

CBS CEO Les Moonves maintains that no skinny bundle can prosper without CBS in its lineup. And other than Sling, CBS has been signed up by most of the other big vMVPDs, including DirecTV Now, YouTube TV and Hulu. 

Being on these new platforms is also good for CBS. 

"When consumers cut the cord and switch to skinny bundles, the economics get better for us, growing rates as well,” Moonves said during the company’s third-quarter earnings call with analysts earlier this month. 

“When a viewer switches from a traditional distributor to a streaming skinny bundle, CBS’s fee doubles, he said. If they subscribe to CBS All Access, CBS’s haul sometime triples. “OTT is a more profitable business model.” 

Another analyst, Marci Ryvicker of Wells Fargo, noted that CBS’s agreement with Dish came a day or so after CBS said it was significantly far apart in talks with the satellite carrier. 

Related: CBS Says Dish Unwilling to Negotiate Fair Deal

“We have been asked who might have ‘caved’ here – our sense is that it was DISH, esp. during a popular NFL-heavy holiday weekend. Content is still king,” Ryvicker said.