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ESPN Thinks Millennials Will Graduate From Cheap Web TV to Expensive Cable

"We suspect they will trade up," ESPN President John Skipper said.

Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

ESPN is the cable network that commands the highest subscriber fees in the U.S., so it has every reason to want to maintain the traditional cable package model. But when cheap Internet TV packages start popping up, ESPN wants to be included. One big reason: It thinks the millennials attracted to them will eventually graduate to more expensive cable packages.

“We suspect they will trade up,” ESPN President John Skipper explained at Thursday’s Code/Media Series: New York being held at the Steelcase WorkLife Center in Manhattan.

Not surprisingly then, some ESPN channels will be included in Dish’s Internet TV service, which Skipper said he was told would launch later this year. In the short term for ESPN, getting its channels included in cheaper Web TV packages could help it attract a new, younger subscriber base.

“We want to figure out products to get those people to buy something,” he said.

It also positions the sports network as a first-mover in the event that Web TV packages take off.

ESPN is seriously contemplating new revenue streams in a search for growth, Skipper said. One idea is selling newly acquired sports content directly to viewers on the Web. ESPN may, for example, offer a Major League Soccer game package that would allow viewers to pay for it and watch it on the Web without subscribing to ESPN.

If ESPN gets more aggressive in offering exclusive video online, it may begin to butt heads with the giant Internet businesses such as Google and Amazon that could have their eyes on live sports programming. Skipper, for his part, isn’t acknowledging that they could be a real threat. Or if he is, he isn’t saying so.

“Name all the technology companies that became great media companies,” he said.

Skipper said he’s “not a big believer” that tech companies like Google will be successful at attracting large audiences for live events. “I’m not sure you’re going to go to Google to watch the Rose Bowl,” he said.

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