Dish to offer web TV with $20/month for ESPN (and more)

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Another major domino has fallen for cord cutters.

The first real Internet-only television subscription package has been introduced by DISH Network, marking an important milestone in the transition of TV from cable to the web.

DISH's service, called Sling TV, offers customers $20-a-month option for a limited batch of channels. It is the first real bundle of TV available online without a cable subscription, and includes ESPN — an important channel for its live and exclusive sports content.

The service will be available in the first quarter of 2015, the company said. It will only be for U.S customers, and can only be streamed on one device at a time.

DISH had reportedly been in talks with various content companies for rights to build a standalone streaming television package. Until now, most streaming TV had only been available to customers that had a preexisting cable subscription. Now, cord cutters will be able to subscribe to DISH's new offering — called Sling TV — without paying for a cable package. The package also includes TNT, TBS, CNN, Food Network, the Travel Channel, HGTV, Adult Swim, Cartoon Network, Disney Channel, ABC Family and CNN.

The service will be available on some connected devices including Roku box, the Kindle Fire TV and some Smart TVs, but not on the Apple TV. Re/code's story was confirmed by DISH via press release.

"Sling TV provides a viable alternative for live television to the millennial audience,” said Joseph P. Clayton, DISH CEO, in the press release. "This service gives millions of consumers a new consideration for pay-TV; Sling TV fills a void for an underserved audience."

The inclusion of ESPN is particularly big. ESPN is the king among cable channels, receiving $6.04 per subscriber, according to SNL Kagan. TNT is the next highest at $1.48. ESPN's popularity allows it to demand that premium, which in turn gives it the kind of money to go after pricey rights to live sports. It recently inked a massive deal with the NBA. ESPN is also exploring its own standalone web offering, although the current plan is to test the waters with a service that streams NBA basketball games.

Sling TV will also include add-on programming for $5 per month, including a "kids Extra" with channels like Disney Junior, a "News & Info Extra) with HLN and Bloomberg TV and a "Sports Extra," the channels of which were not named. DISH said more channels will be added throughout 2015. Sling TV will not include broadcast channels.

A streaming alternative to cable subscriptions has been the dream of consumers tired of paying oversized cable bills for packages of hundreds of channels. A Nielsen study found that cable subscribers receive an average of 189 channels, only 17 of which they watch. While Sling TV is not the a la carte option some had hoped for, its $20 price tag is well below the average U.S. household cable bill of $64.41. Cable costs have risen steadily as well, growing four times faster than inflation, according to a study from the Federal Communications Commission.

On the other hand, many analysts and industry watchers have pointed out that a la carte offerings can add up fast. If a customer was to go for Sling TV ($20/month) plus HBO Go's upcoming online offer (let's say $15/month), plus Netflix ($9/month) and Hulu ($8/month), the bill comes to about $52.

Still, the introduction of such a deal — and the willingness of companies like ESPN to agree to terms for the rights — indicates growing momentum for the cord-cutting crowd. In 2014, HBO announced its upcoming streaming service, as did CBS — the first broadcaster to do so. Now, only five days into 2015, customers have an option that had previously only been theorized as happening some day.

The move puts DISH at the forefront of the web TV market, ahead of competitors such as DirecTV, Comcast and Time Warner Cable. It is an important market for the company, particularly after a 2014 that included declines in TV subscribers as well as profit.

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