For the most part, large TV programmers have maintained their fierce loyalty to cable, satellite, and telco TV distribution partners. But because of the lure of lucrative online distribution, the cracks are beginning to show.
The latest example is ESPN, which is considering offering a new Major League Soccer (MLS) package directly to consumers, regardless of whether they buy pay TV. The vast majority of the video offered by programmers like ESPN sits behind a page that asks viewers to log in with their pay TV account credentials.
ESPN President John Skipper was quick to say that the soccer package “experiment” will in no way effect relationships with pay TV providers, which provide the vast majority of ESPN’s revenues. Actually, ESPN commands the highest price from pay TV operators of any programmer.
“We’ve just got to think about other business models,” Skipper said last week. “We’re not far along on any them, but we do think about how we might capture more money direct from consumers.” Skipper said any direct-to-consumer video package would have to feature content that was not offered on ESPN’s cable channels.
ESPN, Fox, and Univision earlier this month bought rights to MLS games for the next eight years. This cleared the way for ESPN to sell video of the matches directly to consumers via the web and mobile.
The motivation for doing so is advertising. Skipper sees online advertising as one of the fastest-growing and most promising revenue sources for ESPN in coming years.