Just how much does an online television service have to offer before it has a legitimate alternative to pay TV?
Sling TV announced Wednesday that it's adding AMC and its sister channel IFC to its $20-a-month basic package. AMC is home of "The Walking Dead," "Better Call Saul" and "Mad Men," while IFC is a commercial-supported channel featuring original comedies and indie movies. It's also rolling out a new commercial-free movie tier for $5 a month, built around EPIX and the AMC-owned Sundance Channel.
The addition of AMC and IFC addresses a thin spot in the Sling TV lineup, which is traditional entertainment programming. The basic tier's other offerings in that category are TBS, TNT, El Rey and Cartoon Network. Similarly, the "Hollywood Extra" add-on addresses Sling's lack of commercial-free movie channels.
Even with the new additions, Sling's offerings remain thin across the board. The basic tier's 15 channels include one news network (CNN), two sports networks (ESPN and ESPN2), two kids' channels (Disney and ABC Family) and three specialty networks (Travel Channel, HGTV and the Food Network).
That's a feature, however, not a bug. Sling isn't trying to match the depth of the pay-TV tiers that charge considerably higher monthly fees. It's just trying to offer enough to attract a meaningful audience, focusing more on luring the millions of people who don't have cable or satellite TV than on converting those who do.
Launched by satellite TV company Dish Networks, the service is the first to aggregate multiple popular cable networks into a single online offering. It opened to the public on Feb. 9, and hasn't disclosed yet how many subscribers it has signed up.
Chief Executive Himesh Bhise of Synacor, a company that helps pay-TV companies, content providers and consumer electronics companies offer services online, said the opportunity for ventures like Sling TV is real and growing rapidly -- in the range of 15% to 20% per year. That's because the demand for online video services is coming not just from cord-cutters but from all sorts of consumers, he said.
A new study by Parks Associates lends support to Bhise's statement about the potential demand. In U.S. homes with broadband, Parks reported, nearly half of the video viewed on the television was from "nonlinear" sources such as online services, digital recorders, pay-TV video-on-demand channels and DVDs. That's up from less than 40% in the final quarter of 2010.
Sling is still a work in progress in a couple of important ways. The channel lineup isn't final yet, nor has the company finished putting together its add-on tiers. In addition, while most of the channels offer the ability to pause, rewind and restart programs, and some offer full video-on-demand capabilities, a number do not. Those features are important because the service doesn't let viewers record programs.