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Summary:

Microsoft made a lot of potential cord-cutters very happy yesterday when it announced a deal with ESPN to make 3,500 live sporting events available through Xbox Live. But those users should probably hold off before canceling their service and read the fine print first.

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Microsoft made a lot of potential cord-cutters very happy yesterday when it announced a deal with ESPN to make 3,500 live sporting events available through Xbox Live. But those users should probably hold off before calling up their cable companies to cancel service, since they might want to read the fine print first.

One important note not mentioned by Microsoft during its presentation yesterday is that the ESPN deal extends only to users whose Internet service provider has struck a deal with ESPN to offer its streaming video services online. Buried in the footnotes of the press release announcing the deal is this little nugget:

“ESPN on Xbox LIVE, providing great content from ESPN3.com and ESPN.com, is only available to Xbox LIVE Gold members. For access to ESPN3.com content, Gold members must receive their Internet connection from an affiliated broadband provider. See ESPN3.com for details and providers.”

The good news, for customers of companies like Comcast, Verizon, AT&T and Charter is that they’ll have access to the ESPN content even if they’re just high-speed Internet customers of those providers, with no pay-TV subscription necessary. So if you’re a Comcast customer and love ESPN, by all means cut your cable subscription and go broadband-only, maybe supplementing Xbox Live ESPN with a Netflix subscription and lots of Hulu.

But for a number of cable subscribers, that option won’t be available. For some, the ESPN content won’t be available on Xbox Live — even if they get ESPN as part of their basic cable subscription. That’s because some cable providers — including cable companies like Time Warner Cable and Cablevision — don’t have a deal with the ESPN for its broadband-only content. (A full list of providers that have signed affiliate deals for ESPN3 content is available here.)

For ESPN, limiting the service to customers who have a relationship with affiliates makes sense, as it will get paid for that usage. But for Microsoft, abiding by the agreements that ESPN has in place (or doesn’t) could cause confusion and frustration among the Xbox faithful.

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  1. Essentially, the ISP is paying a carriage fee to ESPN – much like MSO’s are paying carriage fees for cable delivery. If more and more content producers were able to set up deals like ESPN has, would this create competition among ISP’s as the users will choose not only on raw bandwidth but also on access to content. If that is the case, than “TV Anywhere” would not be limited to just MSO’s – but to any ISP. You could imagine an ISP competing with Comcast by offering IP delivered content to the living room and the content producer being satisfied with carriage fees and advertising potential.

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  2. This is why you should work on actually reporting news, not just breathlessly reposting press releases.

    ESPN3 is the old ESPN 360, now re-branded. The only “news” here is that your Xbox is connected to your television, which wasn’t the case for most computers that accessed ESPN 360. And, as always, you need a cable or telco subscription to access the ESPN video.

    ESPN is not by any stretch of the imagination going to kill the golden goose. You don’t stay the most profitable segment of the entire Walt Disney Company year after year by biting the hand that feeds you.

    So now you can watch blurry, hiccupy, ESPN streaming video on your HDTV :)

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  3. MG! Money!
    You made my site’s quote of the day for the Xbox ESPN deal. You telling me it’s not for real, bro?

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  4. I know firsthand as a Comcast subscriber, if you plan to cut cable but keep broadband, prepare to pay much more for it. They will definitely make you pay for cutting cable. Though I’m pretty sure most of the major internet providers do this if you cut cable/phone services.

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  5. As Will points out, ESPN3 == ESPN360. This site was primarily for sports that were too unpopular for ESPN and ESPN2 (major league lacrosse, anyone?), although there has been more content lately like NCAABB and World Cup matches. Personally I cut the cord on my U-Verse TV at the end of this year and haven’t looked back thanks to Hulu and my Roku box with Netflix and Amazon Video (and CBS and ABC stations that I can get over the air). My U-Verse internet bill is $35/month, and I probably spend another $20 on Netflix and Amazon.

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  6. [...] Microsoft's ESPN Deal May Not Be a Cable Killer After All [...]

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  7. Argh, that was sooo misleading. They’re just making a video website available on the 360, then.

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  8. [...] Microsoft’s ESPN Deal May Not Be a Cable Killer After All [...]

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