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Sale to EchoStar may extend Slingbox reach

Thu, 09/27/2007 - 8:20am
Ryan Kim, San Francisco Chronicle

Copyright 2007 San Francisco Chronicle

Hatched as a way to watch a San Francisco Giants game while traveling, the Slingbox from Foster City's Sling Media has been a delight for early technology adopters.

Now, after the announcement this week that satellite television provider EchoStar Communications Corp. will buy Sling Media for $380 million, the company founded by brothers Blake and Jason Krikorian in 2004 is poised to go mainstream, taking the idea of "place-shifting" along with it.

The Slingbox links users with their home television programming from any broadband Internet-connected personal computer and many cell phones.

The trapezoidal box intercepts a television signal from a set-top box or digital video recorder and routes it to the owner. The user can then change channels or view different media content stored on digital video recorders or DVD players.

Sling has yet to pass the 1 million sales mark for its devices. But it has been the dominant U.S. leader among place-shifting products, something CEO Blake Krikorian hopes to expand upon with this partnership.

"We're viewed as an innovator and a technology company, but being inside a media company now, it helps us be more of an established player," Krikorian said.
"I think this helps us expand and accelerate our product plans and roadmap," he said. "Our problem has been being able to grow fast enough and have the resources to bring these products to market. This gives us a huge leap to accelerate that."

Meanwhile, Sling announced on Wednesday the Slingbox Solo, which handles high-definition content. The company also announced support today for Symbian-based phones such as more advanced Nokia handsets.

This year Sling is also expected to offer its Sling Catcher, a set-top box for televisions that allows users to watch their content on remote televisions, whether in another room in the same house or at a remote site.

Ross Rubin, an analyst with the NPD Group, said the deal confers more legitimacy on the Slingbox and confirms the overall rise of new media consumption models for viewers.

"In general, TV is evolving beyond an end point for consumers," said Rubin. "Consumers are interested in more kinds of routing of content, whether it's recording to a DVR, accessing content from other rooms in the house, side-loading TV shows to portable devices or accessing content from laptops. In general, as more digital content becomes available, consumers seek more flexibility with it."

With the backing of EchoStar, which owns the Dish Network satellite television service, Sling has new avenues to explore. Analysts said the obvious first step would be to integrate Slingbox functionality into Dish's set-top boxes, bringing the service to Dish's 13.5 million subscribers.

Krikorian said there are a lot of intriguing possibilities when you combine the time-shifting qualities of a DVR and the place-shifting of a Slingbox.

EchoStar said it is exploring a spin-off of its equipment assets, creating a set-top box company with Sling Media in the lineup that can compete with Motorola and Cisco Systems' Scientific Atlanta.

Either way, Sling will continue to operate as a wholly owned subsidiary, allowing it to sell products to customers regardless of their television service provider. Krikorian said he imagines Sling technology could be installed in television set-top boxes or perhaps set-top box functionality could find its way into a Slingbox.

He said the company is pursuing other opportunities beyond pure place-shifting. At the Consumer Electronics Show in January, Sling unveiled Clip+Sling, which allows users to record and upload snippets of television to the Internet or share them with friends.

That service, which will roll out soon, could get a boost from EchoStar. Krikorian said he imagines a scenario where Slingbox offers free and paid premium content through its service, which could leverage EchoStar's media deals and billing system. Slingbox announced this year it is going to offer ad-supported shows from CBS through its computer and mobile phone Slingplayer application.

But Sling faces its share of competitors, including similar products from Sony, which offers LocationFree devices, and Emeryville's Orb Networks. Cable companies like Comcast and Time Warner are teaming with Sprint-Nextel on a service called Pivot, which could ultimately provide cable content through cell phones.

Eventually, all television providers probably will incorporate place-shifting capabilities, though it's not certain if Sling's technology would be the dominant choice, said Steve Clement, an analyst with Pacific Crest Securities.

"I'm positive the cable companies, DirecTV and the telcos, are interested in this technology and are working on this on their end as well," said Clement. "I think it's an attractive technology that they're all looking at."

There are also potential legal concerns. Content owners like Major League Baseball have complained about the Slingbox, saying it facilitates the rebroadcast of games. It's unclear if having EchoStar on its side makes Sling a bigger target for litigation or perhaps having an established satellite company as a parent helps Sling smooth things over with content owners.

Krikorian said he's not worried about the future, as long as the company continues to execute its game plan.

"As place-shifting becomes more popular, we're bound to have more competition," he said. "We won't rest on our laurels; we're just going to keep cranking."

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