Courtesy Total Telecom

(October 19, 2010) Time Warner Cable Inc. and The Walt Disney Co. plan to make ESPN channels available live on the Web for the cable company's TV subscribers on Oct. 25, according to Sean Bratches, executive vice president of sales and marketing for ESPN.

The date coincides with ESPN's broadcast of a "Monday Night Football" game between the Dallas Cowboys and the New York Giants, two teams that hail from Time Warner Cable markets. The service will be provided free to video subscribers of Time Warner Cable.

The move marks a big step forward for the industry's push to move its TV subscription model online and head off competitive threats from emerging online video alternatives that could lead some consumers to cancel their traditional pay-TV subscriptions with cable and satellite companies.

Click here to find out more!Time Warner Cable said in an emailed statement that it was "very excited" about the launch of ESPN3 and ESPN online.

If ESPN's online channels are successful in driving viewership while protecting the TV industry's subscription business, that could provide a vital boost to the TV industry in fulfilling its longheld aspiration of making video content available to subscribers on popular new digital media platforms, including mobile devices like tablets and smartphones. Some observers accuse the industry of being slow in that effort.

If technical problems emerge and viewers manage to get around the online authentication process that confirms their TV subscription, or if they are slow to adopt the service as consumers continue to flock to new Web video services like Netflix Inc. and Hulu, that could be a painful setback for the industry.

Subscription revenue paid by cable and satellite TV providers has emerged as the TV industry's most profitable business as advertising has suffered from the weak economy and the rise of digital media alternatives. It is a business that has long been dominated by ESPN, which generates the highest affiliate fees from TV providers of any programmer because of its abundance of coveted popular sports programming.

ESPN's owner, Disney, has lagged behind other major media companies, like Time Warner Inc., in moving programming online behind a subscription wall, in a concept known as "TV Everywhere." Disney Chief Executive Bob Iger has voiced support for the concept, but he held back from initial tests of services launched by Comcast Corp. and other providers, insisting the company had to be properly compensated for its content.

Behind the scenes, however, technicians at ESPN have been working out the multitude of technical issues involved in putting the company's channels online for almost a year, and that effort kicked into high gear after Disney reached a new distribution agreement with Time Warner Cable in early September that included access to online channels.

The agreement breaks new ground since previous tests of "TV Everywhere" models have included mostly on-demand programming that isn't live, which is often ineffective for programming events like sports and news.

"The essence of the genre we live in is live [programs]," ESPN's Bratches said."That's fundamental to the value of what we do."

Bratches said the company received no direct payment from Time Warner Cable for online programming rights, but the rights were a factor in Disney's overall negotiations with the cable giant, helping win a longer-term deal with attractive terms for the company.

ESPN itself is still working with various sports rights owners to put all its programming online, but Bratches said the company has permission for most of its content and it has the technical ability to insert alternative content into its online broadcast in the cases where it does not. The network also is having discussions with other TV providers.

Bratches also said the online channels won't show advertisements that are on TV during commercial breaks because ESPN plans to begin developing a new stream of advertising revenue by selling those spots.

Verizon Inc. reached a similar agreement with Disney in October for its FiOS TV service. Bratches said that service is planned for launch on Jan. 18, although Terry Denson, vice president of content strategy with Verizon, said the launch could be earlier. Verizon already has a "TV Everywhere" service with content from Time Warner's Turner networks and others.

"We're applying a focused and disciplined approach to authentication that's built around consumer demand," Denson said.

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