The landscape of television and movies has been changing over the past few years in a big way. Less people are watching television live, with big new shows like The Blacklist being the most time-diverted shows on television. In fact, as I write this, I am streaming a television show on Netflix, which is a normal scenario for me. With services like Netflix and Hulu giving people access to shows without a cable subscription, many people have been cutting the cord with their cable companies; saving money with only Internet and subscriptions to these services.
Disney's ESPN brand is in an interesting place in the world of cord-cutters. People badly want to be able to get rid of their cable, but Disney has not made their content, especially their live content, available to the non-cable public. That is why people got excited when ESPN President John Skipper talked with Re/code and discussed streaming capabilities. This is the move that many people have been waiting for.
Unfortunately, Skipper shut down the excitement quickly, saying,
I do want to be clear, we are not looking to disrupt our linear channels and the content that's owned in that. We're going to go acquire new content and new kinds of things to go direct to consumers.
Let me translate: we want a streaming service, but we won't give people the content we already produce. That is unfortunate, but not entirely surprising. While the cord-cutters would like to be able to watch ESPN content without cable, there are some major legal hurdles that currently prevent Disney from making this content available over the Internet.
Let's take the NFL, for example. Any NFL game that ESPN/ABC broadcasts, either in part or entirety, is done under contract with the NFL. However, the NFL has other contracts with other carriers to provide that same content via other methods. For example, you can watch those games on a Verizon Wireless phone via exclusive contract. You could not, then, watch those on a Sprint phone, for example. If ESPN's content were made available via web, that contract would be violated.
Before ESPN could provide any of their existing content via streaming platform, they would need to change their contracts with content providers, and there are a lot of contracts to renegotiate. Some of those, such as the NFL, would not be possible at this point to renegotiate at all. Without those renegotiations, a useful ESPN platform is impossible.