Cord Cutting, Sling TV, and Mi-Connection

Tired of high-priced cable packages that force you to buy channels you don’t want?  Do you keep your cable solely for ESPN?  Have you already subscribed to Netflix, Amazon Prime, or Hulu Plus and realized streaming totally changes how you watch TV?

Maybe you’ve thought about joining the small but growing number of “cord cutters” – those people who have decided to cut their cable subscriptions.

If any of these sound familiar, then you will have a new choice in coming weeks.  The 2015 Consumer Electronics Show (CES 2015) earlier this month gave the public a glimpse of the next big thing in a home entertainment – Sling TV – by DISH Network.

Sling TV will provide access  to ESPN, ESPN II, Disney Channel, ABC Family, Food Network, HGTV, Travel Channel, TNT, CNN, TBS, Cartoon Network and Adult Swim – all for $20/month with no contract.

Yes, you read that right.  ESPN will be available via streaming without a contract.  Just care about college basketball?  You can get the service for a few months then drop it.  Just care about football, you can do the same.

There are downsides though.  No DVR functionality with only limited playback options is one.  It is single stream – meaning only one device can access an account at a time.  Also, it doesn't provide access to local network broadcast TV.  You still need a digital antenna and be in range of local broadcasters to get your local news.

DISH says the service will target millennials and cord cutters and is not designed to be a full replacement of your cable subscription.  What remains to be seen is what impact it will have on increasing the number of households that decide to make the leap and cut the cord.

More importantly to Davidson and Mooresville taxpayers, what impact could this service have on Mi-Connection?  The municipally owned cable provider recently had one of its best quarters ever even though it is still losing money.

With that in mind I asked the CEO of Mi-Connection, David Auger, what impact he thought Sling TV would have on the company’s growth.  Here’s what he had to say…

“My personal opinion is as follows. I believe that the launch of Sling TV will not have a material impact on our growth. However, I believe this is a significant step forward in MI-Connections and the industry’s contractual relationships with the 6 giant conglomerates (Comcast, Time Warner Inc., News Corporation, Viacom, Scripps and Disney) regarding their program bundling demands. In order for this deal to get this far, a couple of these conglomerates have given ground which is historic. I and I would assume other independent operators look forward to competing in world of smaller bundles, or even a-la-carte that provides our customers with more choice. MI-Connection has the infrastructure and technology to do so and in my opinion, this is a step in the right direction.

I would also add that MI-Connection has the most robust data offering in the markets we serve with a tremendous amount of upside opportunity. Over-the-top offerings can only increase this demand.”

That certainly sounds good, but one also has to wonder if this might be a bit of “whistling past the graveyard”.

Sling TV, particularly with its groundbreaking inclusion of ESPN, could be a game changer.  Nobody truly knows how many people that might attract or if it will catch fire outside of its target market segments.  If it does, it could very well hit Mi-Connection in its main revenue source and stymie its progress towards profitability.  According to FY2013 budget numbers on the Town of Davidson website, 58% of Mi-Connection’s revenue was expected to come from video that year with the rest split between voice and data.

As a bit of anecdotal evidence for why this could be an issue, my household “cut the cord” from Mi-Connection about three months ago.  Two of my neighbors recently told me their main reason for not also doing so was access to ESPN.

None of us are millennials, but all of us were looking at it as a way to cut household costs.

My setup of Netflix, Amazon Prime, Hulu Plus along with an expected addition of Sling TV for College Basketball season will run about $850/year less than what I paid previously.  That includes a comparable broadband connection on a promotional rate and purchase of a couple of digital antennas.

Is it for everybody?  Absolutely not.  There are definitely trade-offs.

However, after a three month experiment, I can also say I will probably never go back to a cable subscription again, and that’s the challenge Mi-Connection faces in the future.

If/when cord cutters do return to companies like Mi-Connection it will be for significantly less money as data-only subscribers.

Welcome to the brave new world out there in TV land.

This post first appeared in the Herald Weekly

Bonus Observation:  After submitting this post for publication in the Herald Weekly, I received notice from Sling TV that I would be included in their reviewers program to test the product over the next year.  Stay tuned for future reviews, but first impressions are definitely very positive.