ESPN's Subscription Model: Abuse of a Public Trust?

ESPN 360 launched on Saturday, and Ben Homer called it “groundbreaking.” It certainly is, and in more ways than Ben acknowledged.  I couldn’t wait to try it, but when I logged on, I was stunned.  I can’t. 

According to ESPN, Time Warner Broadband “does not carry ESPN360.com.”  Huh?

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In a recent post about media extending devices, I noted that if I wanted access to Family Guy, The Office AND Rocketboom, I’d have to buy an XBox and AppleTV. Well, now it looks as if open distribution isn’t just threatened by media-extending devices, but by the questionable practices of broadband companies that look a lot like collusion. 

Turns out broadband companies are beginning to strike deals for television programs, music and video games in efforts to differentiate their services. They are applying the cable TV model to the Internet–different content from different providers– which threatens to strangle the spirit of the Internet all-together. 

The power of the Internet, and the promise of Internet-TV, is content that is open, freely distributed and unencumbered.  Open distribution promotes fair market economics, increased innovation, and infinite choice and flexibility for consumers.

The Hollywood Antitrust Case of 1948 liberated motion picture production and distribution by countering the formerly unchecked authority of conglomerates.  It forced the separation of motion picture production and exhibition companies.  Theaters were finally empowered to exhibit movies produced by any studio or by independent producers.  The change created a more competitive market with increased opportunity for independent producers and, most importantly, added value and flexibility for consumers. 

But the precedent set by that groundbreaking suit is being threatened by the actions of today’s media conglomerates, many of which have significant interests in both media production companies AND the tools necessary for media delivery and exhibition (in other words, many media companies again own the means of production and exhibition).  How will Time Warner, which owns scores of media companies with vast vaults of content, react to Disney’s decision to charge its broadband division a premium for ESPN 360? 

Network neutrality refers to a related principle that broadband providers must not use their power over the “last mile” to block applications they do not favor or discriminate between content providers, particularly competitors.  There is an ongoing legal and political battle in the US regarding net neutrality, and it seems to me that clear standards are, as yet, undefined. 

But the fact that ESPN 360 remains unavailable to Time Warner subscribers–barring a hefty premium from Time Warner– seems a clear breach of these principles. If media companies charge service providers varying premiums for various content, won’t broadband providers–which must then choose from various offerings–effectively favor certain websites over others?  Imagine a future in which access to the Family Guy AND The Office requires separate subscriptions to Time Warner AND Verizon. 

What can we, as creators and consumers, do?

Jeff Pulver, founder of Vonage and Internet-video pioneer, successfully petitioned the FCC in 2004 to declare VoIP service neither “telecommunications nor a telecommunications service,” and Mr. Pulver has recently established a Video on the Net Alliance with similar aims of deregulation and open standards for Internet-video.  

The SavetheInternet.com Coalition has similar, albeit broader, aims to keep Internet service providers from messing “with what’s inside the pipes.”

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And I think we should all be outraged.  The tactic taken by ESPN  is analogous to Paramount’s practice of Book Blocking that led to the antitrust lawsuit in 1948.  As I’ve noted in previous posts, the ability to monetize popular videos on the open Internet is clear.   ESPN 360 would have no shortage of eyeballs to generate significant advertising revenue.  Even if ESPN 360 were reliant upon subscription to survive, why should the onus to subscribe be on the ISP and not the consumer?

This back door deal illustrates the need for all of us to stand to protect a public trust, defend open expression and counter the unabated control of media conglomerates.  The underlying principles of the Hollywood Antitrust Case of 1948 apply now more than ever.