The hardware

First, here’s all you need to know about the new hardware in a nutshell: Sling has been an innovator in the space of place shifting, making it possible to stream your TV signal from your cable box to PCs and mobile devices inside and outside of your house. That’s pretty much what the new hardware offers as well, with some added bells and whistles: The new Slingbox 350 is an entry-level model that sells for $180. It’s essentially like the older Slingbox solo, but with a more compact form factor. Also new: Up to 1080p streaming and an integrated IR blaster, so you won’t have to fiddle with extra cables and anymore to control your set-top-box.

The new Slingbox 500.

The Slingbox 500 adds an HDMI connection to the mix, making it possible to daisy-chain it between your cable box and your TV – something that may look familiar to anyone who has ever checked out a Google TV device. And it has two USB ports, which will eventually offer the option to add external storage for personal media – more on that later. Sling has also redone its software, offering new players for mobile devices and the option to beam photo slideshows straight to your TV.

The value proposition

Sling’s media team recently invited me to a demo and briefing about the new units, and their pitch sounded pretty compelling. The basic gist of it: The Internet was supposed to make TV more convenient, but it got actually more complicated. You’ve got apps from operators that work inside your house, but not on the go, apps that have some content but not other shows and apps that work on some carriers, but not elsewhere “This isn’t TV Everywhere. This is TV all over the place,” Sling’s Vice President of Marketing Jay Tannenbaum told me.

Sling thinks that it’s instead easier to get back to the basic idea of place-shifting, which makes your entire TV subscription content available everywhere. Of course, this means that you still need a traditional TV subscription – Slingboxes have never really been about cord cutting, and the new iteration is even less so, as none of the new models features an integrated ATSC tuner capable of receiving over-the-air broadcasts. Sling plans to eventually sell an USB adapter for that purpose, but Sling’s Senior Vice President and General Manager Raghu Tarra told me that over-the-air usage in the past has been “in the single digits.”

The actual experience

Sling send me review units of both devices to test, which made me wonder: who of my friends still has cable? Eventually I found someone gracious enough to host me in his living room for a few hours, and I thanked him by unhooking all of his TV equipment – only to stumble onto a number of bumps on the road. I concentrated on the more capable Slingbox 500 with its HDMI ports – but quickly found out that HDMI simply wouldn’t work with the setup I had at my disposal.

The problem: Some TV operators encrypt the digital signal on HDMI, something that’s known as High-bandwidth Digital Content Protection, or HDCP. And in my case, using a Motorola set-top box leased by Comcast, every single channel seemed to be encrypted. Sling is anticipating these hick-ups and thus asking consumers to also connect the box via component cables.

These can theoretically transmit 1080p as well, but it’s unclear if every set-top box will serve 1080p via component. There is definitely one added step of converting the signal to analog and then back to digital, and in my case, the signal looked considerably worse. That alone is kind of a deal breaker for something you would permanently make part of all of your big screen TV viewing.

The other problem is that this fallback hook-up makes the whole set-up unnecessarily complicated, in my case adding probably an extra 40 minutes as I tried to figure out what exactly was going on with the HDMI signal. Said my host: “I would have put it back in the box 30 minutes ago.”

The bigger issue

Of course, I may have stumbled across the worst-case scenario. The Sling folks told me that Dish, for example, only encrypts its HBO channel via HDCP, and they hope that even that will eventually go away. “We don’t crack HDCP,” said Tannenbaum, adding that the company’s own encryption of streams could help to get studios more comfortable with place shifting. “We hope that this will open up a dialog,” he said.

But the bigger issue seems to me that Sling got its value proposition backward. It is launching with new devices that out of the box don’t add that much functionality over the previous generation. Sure, 1080p is nice, but matters little on a phone screen, and just a little more on an iPad.

Meanwhile, viewing has evolved, and the traditional place shifting approach may not work as well anymore as it used to. In many households, people are now watching multiple programs on multiple screens at the same time, with only one of them being a TV, and others including iPads and laptops. But with place shifting, everyone is still watching the same – your cable box simply can’t serve more than one stream, no matter the cable connecting it to the Slingbox.

Sling potentially has some solutions for these problems, as I was told that the box will eventually get access to a VOD service. The company is also looking into second-screen functionality, making use of the fact that its boxes are sitting in between your cable box and your TV, which could allow all kinds of overlays. However, don’t expect the Slingbox to turn into a full-blown media streaming device with a plethora of apps. “We don’t think the world needs another app store,” said Tannenbaum.

Where’s the vision?

And then there is the personal media angle. The new boxes include functionality for Airplay-like photo slide shows from your mobile devices, and I was shown advanced functionality that inlcudes the ability to constantly synch all of your mobile phone’s personal media to a hard drive attached to your Slingbox – and then consume it on any screen. That’s neat, but doesn’t seem world changing. I already have two services backing up all my camera phone photos to the cloud, and a NAS for local copies. So why add yet another media hub to the mix?

Sure, you might say, that’s you – and admittedly, I’m not the average consumer (and being a cord cutter, not part of Sling’s target audience anyway). But I’d argue that the average consumer won’t spend $300 on a Slingbox either. Instead, they’re gonna just install the HBO Go app, and their cable company’s app, and find that it works well enough, despite all of the aforementioned shortcomings.

What’s missing from the new generation of Slingboxes is a vision. Something grand, something that would change TV like place shifting and time shifting have done in the past. The Slingbox 500 may technically be capable of delivering this, but and may get much better over time – but with its current iteration, it’s just a slightly updated version of something that was cool four years ago.

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The Simple.TV box will be marketed to a growing number of cord cutters that have chosen to do away with their cable packages, giving them the ability to record and stream local broadcast and basic cable channels. While it doesn’t have an HDMI output for hooking up to a consumer’s TV, it will allow them to stream to some connected TVs or other streaming devices that they might have already bought.

Simple.TV works like this: You connect the streaming set-top box to an HD antenna or cable connection, as well as to your broadband connection, and the device allows you to beam live and recorded TV to any number of mobile, tablet or connected device apps that support the box. At launch, Simple.TV will support streaming to the iPad, Roku streaming boxes, Google TV-enabled devices and the Boxee Box.

The box includes an HD tuner and converts digital video feeds to MPEG-4 streams that can be accessed by other devices. While the Simple.TV box won’t have any on-board storage at launch, it will allow users to connect their own USB-enabled hard drives or network-attached storage to record programming from available over-the-air or cable content.

The Simple.TV box will be available in the spring of this year, and will sell for $149 at launch. In addition, consumers will be offered a premium subscription package for $4.99 a month that gives them access to an electronic program guide, enhanced metadata, Series Pass-type automatic recording of their favorite shows, and the ability to stream to up to five different connected devices.

Really Simple Software, which makes the Simple.TV box, is based in Tiburon, Calif. and its founders include CEO Mark Ely, former president of Sonic Solutions (which was acquired by Rovi in December 2010) and CTO Bruce Randall, who was lead architect of Deluxe Digital’s Blu-ray streaming services and had also worked for Sonic Solutions. The startup has about 12 employees and is currently angel-funded, although it’s in the process of raising a Series A round of financing.

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“SlingPlayer for Logitech Revue now works with the Slingbox to extend your complete living room HDTV experience to another TV in your home, or wherever you want to watch. Access the SlingPlayer app from Google Spotlight and change channels, navigate the program guide, or watch and schedule recordings on your DVR – all on the big screen.”

Sling Media, which is owned by EchoStar, rolled out a dedicated Boxee app for SlingBox owners last month. These apps are a welcome addition for any SlingBox owner, but also seem like an attempt to stay relevant in an era where TV viewers rapidly move to over-the-top and VOD options. Sling admitted as much with its Google TV roll-out when it reminded users who “haven’t used (their) Slingbox in a while” to update their firmware.

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Reached in New York Thursday evening after his first Amazon (NSDQ: AMZN) board meeting, Krikorian talked about some of his reasons for joining the board headed by Jeff Bezos. “The combination of Amazon’s proven dedication to being the world’s most customer-centric company and the management team’s passion to continually innovate, makes this a very attractive opportunity.” Krikorian is a longtime Bezos fan.

Amazon hasn’t admitted that it’s near release of a Kindle tablet forked from Android and Krikorian isn’t talking about it either. He should be particularly useful in that area though, as well as the e-tailer’s digital media expansion — including its interest in online video portal Hulu, being shopped around by owners Disney (NYSE: DIS), News Corp. (NSDQ: NWS), Comcast (NSDQ: CMCSA) and Providence Equity Partners.

On the tablet side, Krikorian is well versed in iOS and Android and has developed for both. He’s also friends with Andy Rubin, who heads Android for Google (NSDQ: GOOG). When he started developing home automation, he initially planned to use iOS to operate the system in his own home but opted instead for more flexible Android.

As for digital media, Sling Media spent considerable resources developing its own video portal. Krikorian and his brother Jason sold Sling Media in 2007 to Charlie Ergen’s Echostar (NSDQ: SATS) before its split into two companies. The second company, Dish, is one of the companies looking at Hulu. With or without Hulu, Dish already owns Blockbuster (NYSE: BBI) and is building a video service that would compete with Amazon Instant Video. Krikorian stayed with Sling Media until early 2009 and knows Ergen well.

As an added bonus of sorts, he’s already familiar with Amazon Prime as a consumer. Amazon Prime is the $79 annual subscription that provides special shipping rates. In the last year, Amazon has added and expanded access to streaming movies and TV shows through Amazon Prime Instant Video and it looks like the service will play a key part in many of its other plans.

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In a video posted to YouTube today, Sling mobile product manager Dave Eylar runs down the features available on the new iPad app, calling it “better than any mobile app we’ve ever done… because it makes use of Apple’s live streaming technology with H.264 video encoding.”

The new app has all the same functionality one might expect, including the ability to navigate through your favorite channels and watch time-shifted (or DVR’d) programming. Users are able to fast forward pre-recorded video and even change the aspect ratio on video streams to match the full screen viewing on the device. Once they’ve picked a channel, Sling users can navigate through channel listings by swiping up and down to move to the next station in the program guide, or swipe left or right to skip through their favorites.

Sling has previously rolled out mobile applications for the iPhone, BlackBerry and Android mobile devices, and the ability to stream live video from a user’s Slingbox to his or her iPad has long been rumored. However, earlier reports had Sling expected to roll out the iPad app in September. While Sling hasn’t set a date for its availability yet, the presence of a YouTube video demonstrating it suggests that an iPad implementation is coming soon.

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AT&T back in April 2009 had barred programs that “allowed third-party video transfers” from its network under its terms of service. After an outcry, the operator changed the wording, basically limiting only Sling Media from its network. The justification for such a move was that the bandwidth required for video would overwhelm the 3G network and exacerbate congestion issues.

However, today the news comes that Sling Media has optimized the application in a way that AT&T finds acceptable, so the carrier has notified Apple that the existing Sling Media app, which runs over a Wi-Fi network, can now use 3G as well. It’s uncertain when users will get the 3G-capable app. Additionally, AT&T will provide developers with 3G network optimization requirements for video and other applications by the end of the first quarter through its developer web site.

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