This morning, the NBA and ESPN are announcing terms of the renewal of their licensing contract. The numbers are huge, but that's not what caught my eye.
Early reports say that ESPN will launch a streaming service for live games — and viewers won't need a cable or satellite subscription to view them.
This is the first crack in the structure of the television business that has been in place for decades, in which the programmers and MVPDs (multichannel video programming distributors, aka cable, satellite, and telco companies) have a strong co-dependence and why today viewers must authenticate their cable/satellite/telco subscription in order to stream programming from the TV-everywhere app or network app.
Will other networks and programmers follow suit? Will more consumers cut the cord if they can now get their live sports content online?
Stay tuned for more details . . .
Update 11:45 eastern time.
I just watched the video of the press conference. Adam Silver, commissioner of the NBA, and John Skipper, president of ESPN, both mentioned the new OTT service, but there are scant details and a promise for more later. Mr. Skipper down played the potential impact on pay TV, stating that "the preponderance of the deal is to invest in new products that go on pay TV . . . "and saying ". . . there is no contradiction in continuing to enhance and buttress the current system while building new businesses and new ways to reach fans. We think they are complementary."
Turner President David Levy emphasized that they retained TV-everywhere rights as well as NBA's digital properties, including NBATV, NBA.com, and League Pass, a service that streams games not broadcast.
Taken together, the announcement appears evolutionary, not revolutionary. All the parties here acknowledge the change in viewers' habits, but they appear to have gone to great pains to avoid anything that disrupts the existing television ecosystem.
I'll be watching in the coming weeks for more details about the OTT service — as well as whether it will satisfy consumers who are migrating to digital viewing much faster than the industry is.