Slingbox: From Cult Fav to Mainstream

Since its launch late last year, Sling Media's Slingbox has become a cult favorite, selling nearly 100,000 units with little advertising other than word-of-mouth. Retailers have noticed its growing popularity, and have given it prominent placement in their stores.

The success has surprised the company, says Sling Media vice president of Market Development Jeremy Toeman. He says the reception has been more than they had expected -- especially considering the entire company employs less than 60 people.

"It's great that these companies have had enough confidence in us and the product to launch it nationwide," he told BetaNews in an interview. While BestBuy and CompUSA have supported the device since its launch, the holiday season brought new partners Fry's Electronics, RadioShack and Circuit City.

Toeman also said that Sling Media has not suffered from the issues of educating the consumer on why they would need such a device, as it is an addition to the home theater rather than a replacement device like a DVR.

"When looking at a DVR, a customer will ask 'do I really want to replace my device that already works?'" Toeman explained. "Slingbox's value proposition is completely different," and it opens up new ways to enjoy home entertainment.

Not only could Slingbox be used to watch television when away from home, as most people probably envision uses for the device, but to watch programming while the television is in use for other activities.

"Consumers are quick to pick up on that stuff. They know how to use it," Toeman said. He did admit, though, that such a device might not be for everybody. "Granted, some people won't care," he joked.

Obviously, Slingbox's "placeshifting" technology has raised eyebrows among those concerned with copyright. Toeman said such issues are overblown. Since the signal is being converted from analog to digital, there is a noticeable loss of quality. He said the company is working on ways to protect digital broadcasts when that time comes.

"We're not circumventing DRM, and never will," he assured. Additionally, Toeman offered other ways that both prevent sharing and also end up benefiting the broadcaster.

"First, Slingbox is a one-to-one experience," he said, explaining that only one viewer could be connected to a device at the same time. Second, the quality of video depends on the speed of the user's connection, which does not make the Slingbox a perfect replacement to the traditional TV. Third, Sling does nothing to the programming, meaning a user counts as a viewer in his or her home market and sees all the local ads.

Additionally, the company's research has shown that users on average are "buying into the food chain" -- buying faster Internet connections, subscribing to hot spot services, even buying pay-per-view content.

The Slingbox's growing user base is also demanding more out of the service, and those wishes are the reason Sling Media introduced a mobile client in March for Windows Mobile smartphones and PDAs. The results even surprised Toeman, who was a skeptic of the application's usefulness.

"We are thrilled beyond expectations," he said. "The download numbers have been phenomenal." Toeman added that customers have almost unanimously welcomed the application, and have said it has changed the way they use the device.

Now seeing the success of mobile video firsthand, Toeman now says he thinks the technology does have a future. "People aren't watching this 24 hours a day. They're watching it when they have time to spare," he explained.

While the software is currently free, starting April 26 the company will charge $29.99 USD. Toeman said this philosophy would always apply. "The current Slingbox will have no subscription fee," he explained, "but that's not to say we won't look into something in the future." Any fee-based services would be opt-in, he assured.

He said the decision to offer the software free to current subscribers, but charge newer ones had a lot to do with the impression that the service would be free from the beginning while balancing the needs of the company to recoup development costs.

"We set that impression, and we want to do right by it," he explained.

Finally, Toeman spoke to the future of the company and the Slingbox. A new international version of the device that supports PAL is on its way, as well as new features for the original NTSC device.

Mac support is also on the way, but has been delayed by Apple's recent moves to the Intel chipset. While Toeman acknowledged some users may be getting impatient, he said the company has made a commitment to high quality and would not rush out a product before it met their expectations.

Additionally, he said the company plans to expand beyond its current 60 person staff as the needs of its customers grow. Sling Media currently lists a dozen available positions in its San Mateo, Calif. offices, with another nine positions available in its Bangalore, India subsidiary.

Toeman also hinted at new Slingbox-like devices, and even devices that would be completely different from what the company is currently offering. "Our goal is to build a whole new brand," he said.