June 19, 2010

ESPN's deal with Xbox continues trend of new distribution methods

This week’s announcement that ESPN had partnered with Microsoft to bring live and on-demand sporting events to Microsoft’s Xbox continued the trend of alternative distribution methods for live sports video.

The distribution of sports content has gone from TV to online streaming on PCs and laptops to wireless devices like smartphones and tablets. Now it is aimed for gaming consoles and other set-top boxes, in one way bringing the cycle full circle back to watching on a TV.

Xbox will reportedly carry more than 3,500 live and on-demand sporting events, bypassing traditional cable providers in the process. The live events will come courtesy of ESPN3.com and will include MLB, NBA, tennis, golf, soccer, college football and college basketball. Noticeable by their absence are the NFL and NHL.

MLB.com announced a similar deal with Sony in April to bring MLB.tv to  PlayStation 3 game consoles and the baseball package is already available on set-top devices from Roku and Boxee.

While some have written that the gaming platforms might help kill cable, that is highly unlikely. ESPN’s offerings on Xbox will be limited to users whose ISPs have deals in place for ESPN’s broadband-only content. That may frustrate Xbox owners with providers like Time Warner Cable and Cablevision who will be expecting to see all this new, live video and won't have access.

And while MLB.com’s deal with Sony may steal some subscriptions from DirecTV and its MLB Extra Innings package, and ESPN’s deal with Microsoft represents some displacement of the cable model, in the end, this is about adding another distribution point for content providers and boosting the fortunes of the video game industry.

Content providers like MLB.com and ESPN will benefit not just from the deals for their streaming video, but they’ll also sell more subscriptions, expand their reach and brand, sell more ads and gain more sponsors. Sony and Microsoft will improve their subscription packages, which should help sell more units, and they will be able to charge more down the road.

All of these companies are betting that new and different delivery methods will expand the demand for live video, not just divvy it up into different outlets. It's a bet worth making.

MLB.tv Coming to PlayStation 3 Console {Broadcasting & Cable}
Microsoft’s ESPN Deal May Not Be a Cable Killer After All {CNN.com}
ESPN3.com Enters the Living Room With Microsoft’s Xbox 360 {Sports Video Group}

No comments:

Post a Comment