Content is King. Especially When It’s ESPN.

In case you live under a rock, Microsoft announced a number of Xbox updates yesterday including the news that its refreshed Xbox 360 game console will give users access to ESPN games through the ESPN3 channel. The announcement is bigger than most people realize. Live sports events, many of which are only available through ESPN, are arguably the biggest content draw for pay-TV services. And now ESPN is giving consumers a way to bypass those providers’ video networks to view them.

There is one big caveat, however. While ESPN is bypassing traditional pay-TV pipes, it’s not bypassing the providers themselves. The ESPN3 channel, whether it’s accessed on a PC or an Xbox, requires that you have a subscription with a participating provider, e.g. Comcast, Verizon, AT&T, Cox, Charter, etc. No subscription, no content.

There are two ways to look at this. On the one hand, the subscription requirement could easily be removed – technically speaking – if ESPN decided to cut out the cable and telco providers. And that would change the game entirely. On the other hand, ESPN has carefully preserved its revenue streams by having operators foot the bill even for online content, which gives the sport giant serious incentive to play nice. From a consumer perspective it might sound good for ESPN to cut out the middle man, but the company has built a very profitable distribution system. ESPN wants to expand the reach of its content, but it has no desire to disrupt the existing business model.

Internet video? Bring it on. ESPN a-la-carte? Not so much.

11 thoughts on “Content is King. Especially When It’s ESPN.”

  1. Agreed, it’s huge.

    Live sports is the one thing that keeps a lot of people from cutting the pay TV cord. If ESPN3 delivers the games I need (yes, need) to see, then I’m one step closer to reducing my subscription to only internet. If the quality is good enough, then it’s going to become more and more difficult to argue how paying >$1000 a year for TV is worth it.

    In the meantime, this kills the ESPN Gameplan/Full Court packages (why pay for something that’s now free). I suppose ad revenue/provider fees make up this lost revenue for ESPN.

  2. While nice, I don’t see this as being huge. For those looking to cut the cable tie, this means absolutely nothing. Huge would be getting access to content like ESPN3 on a streaming device without the need for the likes of Cox, Charter, etc.

  3. A cable-free future is a long ways off for most. ESPN makes the vast majority of its money via the cable (and satellite) industry. They’re unlikely to rock that boat too much. Not to mention, the local affiliates are powerful and ABC is ESPN. Or is it the other way around. Either way, there will be no imminent miracles. Rather, it’s going to be a long slog.

    What ESPN3 replaces is the cable packages that probably don’t generate much, and allow someone like me to see just about every college football game (and other can catch obscure tennis or soccer matches that they won’t broadcast on television).

    I’m not positive, but you might only need Cox, Comcast, etc Internet service to receive this. Not sure it also requires television service. Here’s what mine has to say about it:

    All active Cox business and residential Cox High Speed Internet customers are eligible to access content at no additional charge. Content is open to account holders and authorized users and any Cox High Speed Internet tier of service.

  4. That’s correct. You only need to have the ISP, not the TV. That’s always been the case. For example, I had Verison DSL and DirecTV, and I got ESPN360 back in the day. This isn’t HBOGO.

  5. I wonder how long this will be “exclusive” to the XBox? I would love to get access to ESPN3; however, I already own a PS3, multiple Rokus and a couple AppleTVs and I don’t think I am ready to buy an XBox just for the access. Hopefully the exclusive is a relatively short period and others can jump on the bandwagon.

  6. Honestly, if Time Warner would get ESPN3 access for their subscribers, getting all the college football games via HD streaming would be reason enough for me to pick up an Xbox 360. I dropped cable as all I was watching was sports and it wasn’t worth the absurd fees, but if I can pay $250 and get almost all those sports (except the NFL, which ESPN only has 1 game of anyway) again, I’d do it. Stupid Time Warner.

Comments are closed.