• by David Goetzl  @dgoetzl, November 30, 2010

ESPN has trumpeted its ESPN3.com offering as a breakthrough for years. Rightfully so. But now, the cutting-edge site is at risk of becoming marginalized, an afterthought.

ESPN touts its 3,500 live events available online -- and the line-up is impressive. Not just Argentinean polo, but simulcasts of just about every top-tier game broadcast on ESPN, save "Monday Night Football."

Consumers have received ESPN3 essentially gratis, with just a broadband subscription; they have the ability to access it anywhere with a simple log-in. From a business standpoint, ESPN has moved the ball by collecting standalone fees from Internet providers to offer it, giving it a dual-revenue stream on the Web.

Comedy Central hasn't been getting that for free streams of the "Daily Show." Nor apparently has any other programmer.

But ESPN's latest sprawling carriage deal with Time Warner Cable partially neuters ESPN3. And if the deal serves as a template for future agreements with cable and telco operators, that could continue.

TWC realizes that ESPN3 is a cord-cutter's cloud nine: Duke-Carolina basketball, the NBA playoffs, the BCS -- all available without paying for TV? If you can do without "SportsCenter" and "PTI," the top stuff is just about all there.

But TWC said the heck with that, if you want ESPN3 online, you must also pay us for ESPN on TV. TWC customers with just its broadband service are out of luck.

At the same time, those customers who do get ESPN3 now also receive access to a live simulcast of ESPN on the Web -- a "TV Everywhere" initiative. Coming soon, they'll also get ESPN2, ESPNU, ESPN Goal Line and ESPN Buzzer Beater.

Then what's the need for ESPN3 for TWC subs? The premium offerings on ESPN3 will be available via the ESPN online feed. So will content it doesn't have, such as "Monday Night Football" and "SportsCenter."

ESPN3 has the Louis Vuitton Trophy sailing from Dubai, Bangladesh-Zimbabwe in cricket and French rugby. Will Americans en masse suddenly realize they can't live without it? Talk about niche appeal -- that content might not even rise to that level.

However, ESPN3 does have some exclusive college sports, but again, not exactly likely to grab the masses. Temple-Villanova in football can have some appeal, but recently seventh-place games in hoops tournaments?

On Monday, it had a potential score with exclusive coverage of the Women's World Cup draw. And Friday night, it served as a bridge, helping ESPN make the beginning of the Boise State football game available, while another game finished up on the network.

As ESPN3 considers where the "Tres?" fits in going forward, perhaps it should further market its VOD capabilities. That could differentiate the net. As ESPN determines a video-on-demand model on TV, ESPN3 already has it going, offering games and events it carries available via replay for several days after.

ESPN says throughout its life span, it has constantly evolved ESPN3 to improve its offerings and make it relevant. (It had "PTI" at one point.) But if operators follow TWC's strategy in negotiations, that becomes tougher.