How DishWorld became Dish’s online TV testbed

Thought Intel (s INTEL) and Sony (S SNE) were the first ones to try their hands at an internet-based TV subscription service? Think again: Dish (S DISH) has been offering subscription packages of live TV streams, without the need for any satellite dish, for years. However, there’s a catch: Dish’s streaming service only offers access to TV networks from countries like Brazil, India, Vietnam and Taiwan.

DishWorld, as the online-only service is called, offers expats content from around the world, with a variety of bundles targeted towards viewers fluent in 16 different languages. And people are watching — a lot, actually: The average DishWorld subscriber tunes in for five hours a day, said Geoff Campbell, VP of online strategy for DISH Digital, during an interview this week. “This is their TV service,” he added.

DishWorld started out with its own dedicated set-top box, but then launched on Roku in May of 2012 and is now also available on iOS, (S AAPL) Android (S GOOG) and PCs. Dish Digital wants to bring the service to game consoles and dedicated streaming boxes in the next six months, and keep expanding its channel lineup, said Campbell. And while it is doing so, it’s being closely observed by the corporate mothership. “Our parent company is looking hard at what we are doing,” said Campbell.

Why online TV is hot right now

That’s because Dish, like many other pay TV providers, is flirting with the idea to one day stream U.S. TV networks over the internet. The notion to offer consumers these kinds of online-only TV subscriptions has been around for some time, and it’s an appealing one to pay TV providers.

Delivering streams straight to consumers’ TV Roku boxes and Apple TVs would allow Dish to target potential customers that can’t or don’t want to install satellite dishes. Cable companies could even expand beyond their home markets, with Comcast (S CMCSK) potentially selling TV subscriptions to a Time Warner Cable internet customer.

However, these so-called virtual cable operators have yet to materialize. Operators don’t want to open the doors for new competitors, and TV networks don’t want to endanger their lucrative existing business relationships. Some are trying anyway; Intel has been public about its attempts to launch an internet-based TV service before the end of the year.

Sony is reportedly working on a similar offering, and even Google may be testing the waters for an online TV service. And then there is Aereo, mixing things up with its own take on TV streaming. All of that forces the traditional operators to give the whole idea another look as well.

Pay-per-view and freemium

Having a TV streaming service actually up and running, with real customers willing to open their pocket books, is a great advantage in that climate, because it allows a company like Dish to experiment with pricing and service tiers. That’s exactly what Dish Digital is now starting to do, offering consumers free previews, quarterly subscriptions and full-year prepaid packages.

Dish teamed up with payment provider Recurly to get more flexibility with these kinds of experiments, and the two companies are set to announce their partnership Tuesday. It’s the biggest media partnership for Recurly to date, but the company has been gathering more customers in the B2C field. Recurly CEO Dan Burkhart told me that one of the lessons he has taken away from working with media companies is that there is room for hybrid pricing, enabling a company like Dish to combine pay-as-you-go transactional content with subscription packages.

Campbell agreed, adding that DishWorld may offer pay-per-view pricing for certain events, or even try a real freemium model with an entirely free tier. All of which could one day find its way into a streaming offering for domestic TV networks, if Dish eventually decided to launch one, or simply provide more flexible pricing for the traditional satellite TV offering. “There will be implications from what we are doing for domestic programs,” he said.

This summary to this post was updated at 9:03am PT with the correct language spoken in India.