Sunday, March 22, 2015

ESPN - the ultimate moocher, takes lesson from Microsoft playbook

Community Broadband Networks ran a very interesting story about how ESPN3, the internet streaming service of ESPN is making a powerplay against ISPs. Cable companies that are also ISPs are seeing cord cutting nationwide and are working hard to recover their revenue losses. The television networks are no different.

Seeing the weakness in the cable television market, ESPN is playing hardball as noted by Levi C. Maaia, president of Full Channel Labs and a graduate research fellow at the Center for Education Research on Literacies, Learning & Inquiry in Networking Communities (LINC) at the University of California, Santa Barbara. The story is short and fascinating but, what caught my eye was this passage:
"As cord-cutters drop their cable and satellite subscriptions in favor of online streaming, TV networks are scrambling to compensate for this lost revenue.  ESPN3 is doing so by imposing a cable TV-like payment structure on Internet delivery using a model that congress and consumers have decried for decades as inflexible and expensive. These additional costs are already being factored into Internet service pricing, as ESPN3 reaches deals with the Internet providers of tens of millions of customers. If ESPN continues to be successful with this model, we can expect that other content providers will follow suit and it may not be just the cable TV networks that adopt this method. ISPs might be compelled to negotiate per-subscriber fees for access to content across the Web."
ESPN is negotiating contracts that essentially say, "You'll pay for us whether you watch us or not." Upon reading that passage, I'm reminded of Microsoft licensing for OEM computer manufacturers like Dell and Acer. They had a very similar tactic. A typical licensing agreement with Microsoft imposed a license fee on every computer made, regardless if Windows was installed or not.

I don't know about you, but to me, that sort of contract strikes me as akin to extortion. ESPN seeks to compel every subscriber for an ISP to pay for ESPN, whether they watch it or not. I must admit that I hated this arrangement under Comcast when I was their subscriber then. I hate ESPN with a passion, and this news is just gasoline on the fire for me. Why? Because now, ESPN would like me to subsidize all the sports nuts out there through the subscription fee I pay for internet access. They take no quarter and will work relentless to provide no escape for people who don't watch sports. Like me.

If you love to watch sports on ESPN, you can rest assured that guys like me have been subsidizing you guys for years so you can pay a lower fee and will continue to do so for the foreseeable future. ESPN should not be on the basic tier, or I should at least be able to cut them out. But that's not what ESPN wants, no sir. Free market be damned. They want me to support those sports lovers, and they can do it because there is no competition in the cable TV industry or the internet service industry.

From now on, when I see "ESPN", I will think "moocher".
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