ESPN streaming content subsidization: mobile carriers mull partial payment

May 10, 2013
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ESPN streaming content subsidization: mobile carriers mull partial payment

As most carriers have now moved toward using data caps and effectively got rid of unlimited data plans, it seems there are still some big companies out there that feel bad for the users, ESPN being one of them. The sports media network has reportedly been in talks with at least one major carrier about paying them as a subsidy so that streamed ESPN video wouldn't count against users' data caps.

According to the Wall Street Journal, ESPN has been discussing possible solutions for the data cap issue, but the specific carriers that are said to be in talks with ESPN haven't been disclosed. Essentially, ESPN wants to pay carriers to not have their mobile streaming content count against users monthly data caps, since many data plans only allow for a couple hundred megabytes per month.

If these discussions are true, the possibility of this kind of deal happening would still be up in the air, and they know that. The company says that they're not sure if the deal would work financially, but at least they're giving it a try, and it goes to show that not all company's are evil -- some actually want to make life easier, even if that also helps out the company.

However, data caps can also have a direct negative effect on companies like ESPN, where they partially rely on mobile ad revenue. With data caps in place, smartphone users are less likely to stream mobile content knowing that it will obliterate their monthly usage in no time. So, by going to carriers to make a deal like this would not only benefit ESPN, but also ESPN customers.

This kind of deal could also bring in more money for carriers. While they would have to give up a portion of their bandwidth, they would be getting paid by content providers on either a monthly or yearly basis (or possibly just a multi-year contract of sorts). The WSJ reports that both Verizon and AT&T are at least interested in this kind of concept, and it would introduce new sources of revenue without having hike up fees for customers.

SOURCE: Wall Street Journal


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