EchoStar Corp. LLC (Nasdaq: SATS) says multiple, but unnamed, cable operators are beta-testing its tru2way-based "SlingLoaded" set-top, but warns that the activity doesn't necessarily mean purchases and commercial deployments will follow anytime soon.
"There are numerous beta tests going on with that product right now," EchoStar Technologies president Mark Jackson said on Monday's second-quarter earnings call, responding to an analyst question about the company's cable box strategy. "So we continue to test it with a bunch of different cable companies… and we will have to see in the future which ones decided to roll it out, if any."
EchoStar, which spun-off from Dish Network LLC (Nasdaq: DISH) in early 2008, announced its initial tru2way plans in May 2009, starting off with an HD-DVR that comes equipped with "place-shifting" tech from its Sling Media Inc. division, a 500-gigabyte hard drive, and a slot to house a CableCARD. In EchoStar's view, the Sling-capable cable box can help MSOs more easily offer "TV Anywhere"-type services. (See EchoStar Slings Its First Tru2way Set-Top, 'TV Everywhere' Race Heats Up, Time Warner, Comcast Team Up for TV Everywhere, and EchoStar Ready to Split.)
According to a product sheet for that model (the T2200S), obtained at the recent Independent Show in Texas, MSOs can disable some of the capabilities found in a fully-fledged Slingbox and, in doing so, relieve any programming copyright or retransmission concerns cable ops might have. Operators, for example, can limit the tru2way box to "sling" video only to PCs and other digital displays in the home, or allow place-shifting on a channel-by-channel basis. (See EchoStar Puts Sling Out to License .)
An EchoStar spokesman recently confirmed that those options/limitations were put in place following discussion with cable operators. MSOs, he said, "all have different needs, so we developed some options for them."
Time will tell if those feature-trimming options will help seal any deals. Yesterday an analyst pressed EchoStar on when it could expect to "get some feedback" from the MSOs.
"We are hopeful that we will have some announcements before the end of the year," Jackson responded. "But I can't guarantee that we will see that or not."
He said some EchoStar partners are showing interest in integrating standard, standalone Slingboxes with their existing set-tops.
In the meantime, corporate cousin Dish Network is a bit closer to introducing its Sling-enabled box, the ViP 922. "We've got to keep feature creep from happening, but we are working with them to launch that [product] hopefully soon," Jackson said.
Although EchoStar is eager to branch off and win cable business here and abroad, Dish remains EchoStar's biggest customer by a wide margin.
According to EchoStar's 10-Q, about 79 percent of the revenues produced in the second quarter came from Dish (via set-top box purchases and related services).
For the quarter, EchoStar posted revenues of $381.1 million, down 20.7 percent year-over-year, but profits jumped to $101.8 million ($1.18 per share), versus $47.8 million (53 cents per share). (See EchoStar Posts Q2.)
The company's 10-Q also noted that EchoStar's exposure to the ongoing TiVo Inc. (Nasdaq: TIVO) DVR-software litigation is limited to just $5 million. However, EchoStar would be responsible for any amounts beyond that figure should Dish somehow be unable to pay for any additional monetary damages from the lawsuit, which centers on TiVo's "Timewarping" patent. (See TiVo-Dish DVR Slugfest Rages On .)
Jackson stressed that the ongoing TiVo legal matter has not had an overhang on EchoStar's customer discussions.
— Jeff Baumgartner, Site Editor, Cable Digital News