WatchESPN: An Innovative Opportunity Wasted

// Cable television has always seemed like a necessary evil. Let’s be clear, television providers provide a product that I enjoy. While I enjoy the product more that I should, I emphatically despise the system.

Ostensibly, Cable providers operate as a part of the free market economy, except that they don’t. In reality, cable providers occupy a special place in the legal system known as a natural monopoly. This placed cable providers in the enviable position of being able to control the programming and, more importantly, the advertising the local residents would be able to see.  Limiting the number of firms that have access to our eyeballs could allow TV providers to determine the winners and losers in a particular industry.  Obviously, this placed them in an incredibly powerful position. A position that they would not want to give up easily.

Thankfully, a company called America Online unleashed the internet onto our households.  While download speeds were initially very slow, technology accelerated and soon it was possible to download an entire album overnight.  Now cable providers, who doubled as the dominant internet service providers, were able to control access to the system, but they could not control the content that users consumed.  This presented them with the terrifying prospect of losing control over our consumption habits.

Much to the chagrin of our TV overlords, companies like Hulu and Netflix began to allow users to select their own content, whenever they saw fit.  If users decided to take the illegal route, they could download entire television series to watch for free, without advertisements. Despite these advancements, users were only allowed to view to view content after it aired on cable TV.  Now, waiting overnight to see the latest episode of House isn’t that big a deal.  While this may hinder water cooler conversation, the content itself is not time dependent.   One notable exception to this rule is live events, including the lifeblood of American culture college football.  I’m obviously being facetious here, but you get the point.

Sensing an opportunity, ESPN took the bold step of introducing ESPN3.  This digital haven allowed users all over the country to access all of ESPN’s live sporting events. Even games that didn’t air in your municipality could be viewed.  This means that if you went to college in Virginia and lived in California, you would never have to miss your alma mater’s games every Saturday.  While there were notable exceptions (i.e. MLB and NFL coverage), ESPN3 was a step in the right direction.

That’s right, I said WAS.  Starting in August 2012, ESPN began limiting the content provided on their digital playground.  No longer would content broadcast on ESPN2 or ESPNU in evenings, or from noon local time onward on weekends, can no longer be seen live on ESPN3 without the expanded service from a WatchESPN affiliate.  A WatchESPN affiliate means a partner cable provider.  I have no basis for this assumption, but I can only believe that this complete and utter sell out was an effort to appease national cable providers like Time Warner and Comcast who were tired of having their "natural monopolies" challenged.

Other than pissing off countless customers who had grown accustomed to this service, ESPN took a huge step backwards in terms of innovation.  We live in an era where consumers constantly expect more, not less.  By offering most of their coverage to consumers, ESPN has already opened Pandora’s Box.  Since 2007 when ESPN3 placed its emphasis on live sporting events, consumers had grown accustomed to watching all of ESPN’s live college football broadcasts.  Whether they like it or not, we’re not going back.

As I sit typing this, I am logged into WatchESPN.com.  Every single football game is currently blacked out in my area.  I no longer even have access to ESPN3 exclusive content that isn’t airing locally.  This is the kind of corporate collusion that stifles innovation and is bad for consumers.  It is the antithesis of the free market system that our country is supposed to stand for.

Beyond that, this move is a little naïve.  It’s a bit like Apple giving up on the EPEAT standards and expecting no one to notice. I can only hope that ESPN and their parent company Disney come to their senses. We don’t need ESPN’s support or permission to be able to watch college football from the comfort of our computer screens.  Though, I assume that, like me, most consumers would prefer to watch sporting events in a legal manner.

In the meantime, there are always other ways to access the content.  No matter how hard they try to influence regulation and law enforcement, the massive corporations that “own” media content will never be able to keep up with those who seek to make media available for free. The only thing they can do to counteract the trend is to provide easy, free access to their programming.

Now, I understand that this sounds silly a first.  Why would the offer their content for free?  Well, the four networks have always done so and they seem to be doing fine (with the possible exception of NBC).  In actuality, they are not offering anything for free. What content providers, like ESPN, really sell is the access to our eyeballs.  Advertising is their real cash cow.

This brings up my next point.  Advertising on traditional television is an entirely passive act.  As consumers become more aware and have access to more content options, they are less likely to watch or be influence by TV commercials. On the other hand, the internet offers the opportunity for content rich experiences that will be much more likely to influence consumers.  Sure, these experiences may be more difficult to create, but they are much more likely to have the desire effect.  Imagine advertisers offering games like Google occasionally does on its homepage.

Additionally, computer based mediums allows for increased static advertising opportunities.  While consumers dislike static advertisements on websites ranging from Facebook to CBS, we have come to accept them.  Unlike most television programs, these advertisements take up some of our screen real estate all of the time, not just during commercial breaks.  This represents a huge opportunity for media providers.

In the end, I don’t think content providers understand how users consume media through the internet, nor do I believe that content providers understand how to take full advantage of its monetization potential. Until they do, these providers seem content to stifle innovation in favor or protecting an antiquated business model.  This is the same issue the music industry has been faced with since the rise of Napster.  We as consumers must find a way to prevent this from continuing, either through applying pressure to content providers or through legislation. A few greedy individuals are preventing consumers from seeing the kind of innovation that the free market system is supposed to foster.

We, as consumers, should do everything we can to convince ESPN to change their course.  We must encourage them to foster the natural evolution of content as opposed to bolstering an outdated medium.  Further, we must lobby our politicians to convince them to support promote the innovation that we deserve and our economic system should guarantee.

// Patrick

October 27, 2012 by Patrick
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