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After Sony Shares Plans, ESPN Shopping Internet TV Deals

After Sony Shares Plans, ESPN Shopping Internet TV Deals
By Jennifer LeClaire

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Last week, Sony made major headlines by announcing a tentative deal with Viacom. Sony may be the first to do a deal with Viacom, but few of these providers are interested in doing an exclusive deal, at least for long, said analyst Ross Rubin, commenting on reports that ESPN is interested in moving to Internet TV.
 


The Internet TV talks are heating up. The latest news comes from the Walt Disney Co. According to Bloomberg, Disney's ESPN sports network is in talks to offer its programming on Internet TV services like the one Sony announced last week.

Bloomberg quoted ESPN president John Skipper saying the Internet TV provider would have to pay as much as or more than cable and satellite services to get its content. He said Internet TV services would have to buy "the whole suite of products. We're not going to offer one-offs."

By the whole suite of products, Skipper means ESPN, ESPN2, ESPN News and the various mobile apps the broadcaster has developed. ESPN has plenty to bargain with as media research firm SNL Kagan reports it is the most valuable channel -- driving the highest subscriber fees -- on basic cable. ESPN 3D is the second highest at $2.71 per subscriber.

Exclusive Deals?

Specifically, SNL Kagan reveals basic cable customers paid an average of $5.06 a month for ESPN in 2012 -- and the broadcaster has nearly 100 million subscribers. That has caused Fox and others to jump in with rival services. By way of comparison, the NFL Network is in sixth place at $.84 per subscriber while ESPN2 is eighth at $.82.

We caught up with Ross Rubin, principal analyst at Reticle Research, to get his thoughts on the rush toward Internet TV. He told us Sony may be the first to do a deal with Viacom, but few of these providers are interested in doing an exclusive deal, at least for long.

"None of them, for example, has an exclusive deal with traditional pay TV providers, at least by choice," he said. "Assuming the deal has been done, though, it would represent progress by at least one other over-the-top provider after Intel to offer a credible broadband alternative to pay TV providers. Sony will surely not be the last."

How Sony Stirred the Waters

Last week, Sony made major headlines by announcing a tentative deal with Viacom. Viacom is behind many popular cable channels, from MTV and Nickelodeon to Comedy Central, BET and beyond. These and other channels would appear on an Internet TV service Sony is reportedly developing.

The New York Times is positioning the deal as the "first of its kind between a major programmer and any of the technology giants that are trying to disrupt traditional modes of TV delivery." Yet, little is known about Sony's plans for Internet TV, including what it may be called or how it will be delivered.

The Sony news comes less than a month after Google rolled out its Chromecast solution for $35. For more than a week, the industry buzzed about the dongle that's trying to take on Apple TV, Intel and others.
 

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