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ESPN360 Ushers In Cable-ization Of The Internet

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Imagine a world where you want to watch videos on, say, Hulu.com, but you are unable to because Hulu has an exclusive deal with TimeWarner. If you want Hulu, and a premium package of websites that includes the New York Times, Yahoo, and iTunes, you can only find them on TimeWarner.

All of the above is hypothetical, but the seeds of that world have already been planted thanks to an exclusive content deal ESPN360.com has with certain internet providers. The reverse of what net neutrality advocates feared is perhaps even more unsettling and more likely—it’s the cable-ization of the Internet.

ESPN’s arrangement isn’t new; it rolled out quietly a couple of years ago under a lot of radars, benefiting no doubt from all the Net Neutrality noise emanating from the provider side. Peer-to-peer throttling, grandstanding on Capitol Hill, ISP executive plans to charge Yahoo a premium to load faster than Google, et cetera et cetera et cetera. Perhaps that was just the tip of the proverbial iceberg; perhaps it was misdirection; perhaps it was providers trying to get the jump on content sites before content sites got the jump on them.

Business is all about leverage, after all.

Sports fans wanting to see ESPN360 content but subscribe to the wrong service provider are greeted with this message:

ESPN360 Ushers In Cable-ization Of The Internet

An ESPN executive described the situation as “just the point of view” the company has that speed won’t dictate the marketplace, but rather content. According to a Verizon spokesperson quoted in that same Wired article, Verizon’s cool with it. They’re licensing Disney content, too, which owns ESPN.

And yes, you read that above message correctly. At least part of your government is participating as well.

Remember that New Years Eve scuffle between Viacom and Time Warner Cable when all Viacom channels—Nickelodeon, MTV, VH1, Comedy Central—went blank for a few hours while the two companies worked out their financial difficulties? Won’t it be fun when MSN goes dark across all Comcast-connected computers?

Those of us who watched the Net Neutrality debate closely felt all this maneuvering had something to with the TV/Web convergence. (That’s confirmed here.) Why else would News Corp. and the MPAA care so much about blocking legislation and donating to Congressmen who opposed net neutrality? It was thought to be about piracy—and it was about piracy—but it appears this was on the slate as well.

One assumes that if/when all the corporate wheeling and dealing is over the remainder of the billion sites on the Internet that have not struck deals will still be available, in their own sort of public access realm—at least one hopes that these deals would not be exclusive to competitive non-licensed sites.

The beauty of the Internet has been the way it has leveled the media playing field. Entrenched established media aren’t fans of such leveling, however—ask any newspaper having to lay off journalists or shut down their print components altogether.

Rather than upgrade their networks, ISPs have employed a graduated system to squeeze every planned-obsolescent penny out of subscribers while complaining about available bandwidth as the US sank further behind in broadband penetration and speed. Fiber and advanced network management mooted those anti-net neutrality arguments, only to have what looks like a bigger monster rear up on the content side.

With network capacity issues virtually moot, the big content providers are left with the dilemma of how to make money from online content. One big problem (for them) is there’s too much competition out there. The basics are the same though: Behemoth corporations looking to squash competition in any way they can by leveraging as much as they can for their own ends. The consumer will be left out in the cold.

It’s hard to imagine a free market solution to this—unless the market really does want a cable-model internet, which is doubtful. It’s also hard to imagine these schemes succeeding in the face of enough public resistance and enough great content providers refusing to strike deals. With any luck, it’s a tempest in a teapot and those who strike deals will fall on their face. It’s easy to imagine, though, our unwalled garden being boarded up again.

 
 

 

ESPN360 Ushers In Cable-ization Of The Internet
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  • Mike

    The notion that content owners should *not* provide additional content to their partners because it’s “not fair” is insanely myopic. If the alternative is to never stream certain content because it’s expensive or hurts TV ratings or whatever, doing these kinds of deals is clearly the way to go. If my ISP can get me more streaming video than is available on the “regular” internet, more power to me. If not, I’m hardly hurt by it.

    The author is advocating philosophy above pragmatism. Never smart.

  • Guest

    It’s already the case that content is unavailable if you’re not browsing from a US IP address. The BBC denies some content if you’re not in the UK.

  • Guest

    Just checked it, Hulu refuses to show media here with a lame excuse.

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  • Chris

    Can go blank themselves with the way the act with ESPN360.

  • Guest

    I have no problem with wanting to have special content that they can make money off of. ESPN.com has Insider articles that you pay a yearly fee to access. I subscribed for a few years, but decided it was too expensive for the extra content I was getting. My problem with something like ESPN360 is that I don’t even get a choice. I’d like to watch the Big Ten tournament at work, but I can’t, so they will never get any revenue from me. They need to have a tiered payment system that lets me pay a couple bucks to watch one game, or a monthly fee, or a yearly discounted fee. If I’m paying for one game after another and decide I like the service, then I’ll spring for a membership. That’s how to make money. Provide flexibility and people will try your service, and if it’s good, they’ll be hooked.

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    Just checked it, Hulu refuses to show media here with a lame excuse.

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