No Free Ride: ESPN Charges For Some Web Shows

by David Goetzl, Nov 21, 2008, 6:59 PM

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ESPN appears to be heeding cable operators' frustrations with networks placing so much of their premium content on the Web for free.

The sports programmer has recently started charging for two popular shows that had been available at no cost on ESPN.com. And it may restrict access to NBA, Major League Baseball and other attractive games that it streams gratis on broadband site ESPN360.com.

"We've gotten very careful (with) what we stream free on the Internet," said Sean Bratches, ESPN's executive vice president of sales and marketing.

Over the past several years, ESPN has moved aggressively in making full episodes of its popular debate shows "PTI" and "Around the Horn" widely available on the Internet. First, the shows were carried on ESPN360.com (which is free, but in only 24 million homes). Then, they were moved to ESPN.com, available to everyone for nothing.

No more. Now, in order to view the duo on ESPN.com, a person must be what's called an ESPN Insider and pay a fee ($6.95 a month, $39.95 a year).

ESPN is also looking at curtailing access to some of the live events it provides at no cost on ESPN360.com--where it offers a wealth of high-profile simulcasts of games seen on its networks. Here again, the programmer has been ambitious in expanding its offerings, which include NBA playoff games; Duke vs. North Carolina and other top college basketball games; SEC football; and starting last summer, Major League Baseball.

But late last week, ESPN's Bratches said the company is looking to ensure that the online simulcasts would only be accessible to people who also pay for cable (or satellite or telco TV) service.

"We are looking at authentication technology where you can only have simulcast games if you're a subscriber to the linear feed at home," Bratches said, speaking at an industry event.

Access to ESPN360.com is free to subscribers of broadband providers that have agreed to pay ESPN for the rights to offer the site. Homes with Verizon and AT&T account for the bulk of the 24 million subscribers. Although the bulk of those surely also have a cable subscription, there is certainly a subset that does not that would be affected by ESPN's restrictions.

Large cable operators such as Comcast and Time Warner Cable have refused to offer ESPN360.com.

ESPN's signal that it may pull in the reins with free ESPN360.com content would seem to be in response to cable operators' fears about what's referred to as "cable bypass." In that scenario, consumers could drop their expensive cable subscriptions if the same content is available free on the Web (even if the picture quality is inferior).

One cable executive in particular--Time Warner Cable CEO Glenn Britt--has hinted that if networks continue to offer so much content online, his company would look to reduce the fees it pays networks to carry their channels. Britt's initial complaints came after Viacom made episodes of Comedy Central's popular "The Daily Show" and "The Colbert Report" available on the Internet.

At the time, a Time Warner Cable spokesman told The New York Times: "(Networks) can't have it both ways. If they put content they ask cable companies to pay for online for free, they are making it less valuable and we should expect to pay less for it."

Any reduction would be a major hit to ESPN. The network is in close to 100 million homes and may receive as much as $3.50 a month per subscriber from cable, satellite and telco TV operators.

ESPN's Bratches said the network is "very conscientious of (its) relationship" with distributors and added that it is "not trying to affect the price/value relationship with affiliates."

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