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Slinging it - September 25, 2007

Sling Media's decision to sell to EchoStar for $380 million, which the companies announced late Monday, makes a lot more sense in light of the news this morning that EchoStar is considering plans to split itself into two publicly traded companies.

Under the plan floated this morning, EchoStar's satellite TV business would continue to operate as DISH Network, while its technology and infrastructure assets would be spun off separately to shareholders. Presumably, Sling's TV place-shifting technology would go with the second piece, making it easier for Sling to remain "operator agnostic," as CEO Blake Krikorian told paidcontent.org said is the plan.

Some other thoughts:

• Splitting DISH and Sling would make things cleaner for DISH from a licensing perspective. If Slingbox remains corporately part of DISH, it probably wouldn't be long before the networks and content owners tried to bake place-shifting into the license fees paid by DISH, potentially raising DISH's programming costs. By splitting the companies, it will be easier to maintain Sling's status as an unlicensed, "fair use" technology.
• While the quest for PC/TV convergence has been subjected to well-heeled engineering firepower from the likes of Apple, Microsoft, Cisco Systems and others, Sling Media has gotten farther than most by approaching the problem from the other way around: Rather than focusing on the PC as the point of acquisition and then moving content to the TV, the Slingbox uses the TV as the point of acquisition and sends the content to the PC.
• Why is Hulu worth $1 billion (based on Providence Equity Partner's 10% investment) and Sling Media, with an actual business model, working platform and customers, worth only $380 million?

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