Is this awesome or what? ESPN, aka, "The Worldwide Leader in
Sports" wants to help pay for smartphone users' monthly data
The plan isn't really a plan and no actual number crunching
has taken place yet, but sentiment counts for something, right?
The point, according to
The Wall Street Journal
, is that ESPN, a subsidiary of The Walt Disney Company (NYSE:
), realizes many sports fans drain their monthly data buckets
viewing ESPN mobile content and they want to help.
ESPN also realizes that people who use up their data stop
viewing. Ultimately this costs the network revenue once
advertisers see mobile viewership has gone down because users
have maxed out their data plans for the month.
The Wall Street Journal says ESPN has talked with at least one
major carrier about a plan in which ESPN subsidies would mean
ESPN content wouldn't count against monthly data caps. Sadly, no
deal is really in the works. According to WSJ, ESPN isn't even
sure it could put together a package that works financially in
the first place.
There is also concern that subsidy deals like this might be
frowned upon, or at least scrutinized, by the Federal
Communications Commission, leading to speculation about
alternatives, such as some sort of advertising revenue sharing
While the carrier with which ESPN has talked wasn't revealed,
Verizon Communications (NYSE:
) Verizon Wireless Chief Executive Dan Mead told The Wall Street
Journal that the company is actively seeking deals with both
advertisers and content providers to pay for data capacity on
behalf of consumers. AT&T Inc. (NYSE:
) previously said it was interested in such a strategy as
Under the "win-win" caption, carriers, like Verizon and
AT&T, are looking to increase revenue without raising fees.
Content providers, like ESPN, as well as advertisers, want to
ensure data caps don't become a barrier to viewership and ad
WSJ reports that, according to media and marketing information
giant, Nielsen Holdings N.V. (NYSE:
), the average U.S. mobile subscriber only used 0.659 gigabytes
of data per month in the last quarter of 2012. Nonetheless, ESPN
said at least one carrier told it that significant numbers of
mobile users reach their monthly cap before the end of the
In attempting to find a way to subsidize viewership, ESPN is
also keeping its eye on News Corp (NASDAQ:
), which plans to launch the Fox Sports 1 cable sports network
soon. This only adds to sports viewing competition that already
includes cable sports channels by Comcast (NASDAQ:
) owned, NBC and CBS (NYSE:
At the time of this writing Jim Probasco had no position in of
the mentioned securities.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
Gain access to more investing ideas, tools & education.
Get Started on Marketfy, the first ever curated
& verified Marketplace for everything trading.