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Is Sling Media acquisition good sign for IPTV?

Some within IPTV sector hope EchoStar's $380 million purchase of SlingMedia is only the first big deal.

FOSTER CITY, Calif.--Some of Sling Media's peers and competitors applauded the company a day after word came that it had been acquired by EchoStar Commmunications for $380 million.

At the IPTV World conference here, attendees said they were happy to see a fellow Silicon Valley company striking pay dirt. Many of them also said they owned a Slingbox, the hardware that beams shows from a home TV to anywhere in the world an owner might be.

"This is an excellent outcome for the Sling Media guys who really executed well," said Ward Williams, vice president of marketing for iChip India, an IPTV start-up. "They did a good job of taking what is essentially a great feature and communicating to consumers why they needed the service. For the rest of us, deals like this are encouraging."

Internet Protocol Television (IPTV) describes the distribution of digital content to televisions over broadband networks. A score of companies are here showing off their wares and exchanging estimates on when mass adoption may finally arrive. Another reason for the sector to feel encouraged is that Sling Media's acquisition is a sign that big media firms may be eyeing the sector, according to Conleth O'Connell, chief technology officer for Vignette, which develops content-management software.

O'Connell recalled hearing News Corp. Chairman Rupert Murdoch say in a speech that the public has grown weary of information traveling down a one-way street. Murdoch said, according to O'Connell, that everything from video sharing to blogging indicates that consumers want some control over information.

"The Slingbox is inside a person's home but allows them to send their TV experience outward," O'Connell said. "We had all better listen to what consumers are telling us. They want this notion of sharing. In the future they'll want to send a favorite TV clip to a friend or community. In the past, the direction of information has gone one way: from broadcasters to viewers."

Buying an IPTV property may provide media companies with a way to help users become more interactive with content, but Henry Choy, a video and TV analyst with Jon Peddie Research, said Sling Media offers EchoStar a chance to branch into a mobile market without having to depend on others.

"EchoStar is a satellite company and they don't have the broad access that the telcos or cable guys do," Choy said. "This is clearly a way for EchoStar to appear in any device they want. They don't have to rely on AT&T or other carriers. If you have Slingbox you can see EchoStar programming anywhere you want. It moves EchoStar out of the home. "

Provided it works, cautions Choy.

He points out that the Slingbox is a beautiful way to distribute content when there's enough available bandwidth. He argues that anybody who owns a Slingbox knows what it's like to see grainy or choppy images due to an overtaxed network.

Choy predicts that as compression technology improves, bandwidth will be less of a concern. When that happens, it's going to be tough to compete with the Slingbox. While many IPTV companies are trying to combine traditional TV with Internet video, most of the Web's top video sites would love to offer premium TV shows.

"Rather than having to look for Web content," Choy said. "It's much more compelling to watch the exact same content that you have at home."