clock menu more-arrow no yes

Last Night We Got a Look at the Future of TV -- On the Web, a la Carte

Last night's Ohio State/Oregon game was historic. But next year's College Football Championship will be even more important for the TV business.

Last night was the biggest college football game of the year. And if you wanted to watch Ohio State beat up on Oregon, you needed to have cable TV, or know someone who did, since ESPN has the exclusive rights to the College Football Championship.

But next year you won’t need a pay-TV subscription to see college football, or anything else ESPN shows on TV. You’ll just need to subscribe to Dish Network’s Sling TV service, which gives you ESPN and a dozen other channels, delivered over the Web, for $20 a month.

Pair that with HBO’s announcement that it’s going to sell a standalone service on the Web, and we’re at the beginning of a new era in TV.

A la carte pay TV, delivered over the Internet, seems like such an obvious idea — and one that already exists outside the U.S., in places like the U.K. — that it’s hard to imagine how big a deal this is for the TV Industrial Complex. Last week, a couple of TV veterans I talked to at the International CES refused to believe Sling TV was real. They’re convinced this is a feint on ESPN’s part, in order to do (here they sort of shrugged) something!

Nope. It’s real, and it should go live in a few weeks. So who’s buying?

Lots of smart folks (thanks, Dad!) have noted that a la carte Web TV may cost users the same, or more, as a conventional pay-TV package. A do-it-yourself package that included Sling TV, HBO’s upcoming Web-only service and Netflix, plus a broadband subscription, could run around $90 a month — right in the range of a traditional pay-TV + Internet bundle.

So I do think that for a lot of TV watchers, there won’t be much reason to switch from Cable over to the Web.

But just like the HBO executives who announced their Web plan last year, ESPN executives say they’re not courting people who are already getting pay TV. They’re targeting an audience of 10 million to 12 million people who have broadband but not pay TV.

Think about an apartment full of dudes, a couple years out of college, sharing Internet access but not cable TV. It’s easy to imagine them paying $20 to watch last night’s game, then keeping the subscription rolling after that.*

It’s possible that some of those guys will eventually upgrade into a “real” pay-TV package, like ESPN boss John Skipper says he’d like to see. But if they don’t, that’s still extra revenue ESPN wouldn’t otherwise have. They’ll take it.

Also, remember that like HBO’s Web move, ESPN’s Web move is also meant to increase its leverage with pay-TV operators, which will still generate the majority of its revenue for years to come. In ESPN’s case, it could help the network get access to the smallest “skinny bundles” that pay-TV operators offer.

Comcast, for instance, currently sells a $30-a-month “digital economy” package that includes CNN, but not ESPN. If Dish is going to sell ESPN in a $20-per-month package, that might convince Comcast to make room for the sports channels.

Theoretically, at least. The main theoretical is how well Sling TV performs. Will it provide TV viewers — and sports fans specifically — with a TV-quality image, consistently, even if hundreds of thousands of people are streaming shows at the same time?

Sling TV’s CES exhibit looked quite nice, of course. But that’s meaningless. In the real world, there are lots of ways for Web video to fail, and it’s pretty common to hear about problems during big events.

Last night, for instance, it took me several tries to get WatchESPN (the ESPN streaming service that pay-TV customers can use) up and running. The problem seemed to be on Time Warner Cable’s end, but I don’t know if the average user is going to diagnose that — if there’s a problem, they’re likely going to complain about the company selling the programming, not the utility that’s delivering it.

On the other hand, once the stream worked, it worked. The image looked pretty good on my MacBook (that’s where the screen cap at the top of this post came from), but I’m not convinced it would be adequate if I “mirrored” it to my Samsung plasma screen using Apple TV, which is the way I’d have to get Sling TV there.

So we’ll see, and soon. But unless the service is flat-out unacceptable, I think it’s going to get a lot of pickup. Which means that even if the other TV guys are uneasy with it, they’re going to join up, or create similar services of their own. This looks like the future to me.

* Dish says that, unlike pay-TV customers, Sling TV customers can cancel their subscription whenever they want.

This article originally appeared on Recode.net.

Sign up for the newsletter Sign up for The Weeds

Get our essential policy newsletter delivered Fridays.