ESPN is reportedly considering selling online access to live Major League Soccer games to consumers without pay TV subscriptions as it seeks to find ways to generate revenue outside of the traditional pay TV system. Currently, ESPN and other sports broadcasters receive the majority of their revenue from the likes of Comcast Corp., Dish Network and other pay TV operators which pay massive fees to carry their programming. According to SNL Kagan, ESPN brings in $6.04 per subscriber each month -- the most among cable channels -- thanks to its contracts with pay TV subscribers.
Speaking at an event in Bristol, Conn., where ESPN is headquartered, ESPN President John Skipper said, "We've just got to think about other business models. We're not far along on any them, but we do think about how we might capture more money direct from consumers." When asked what specifically the network is considering, Skipper pointed to the recent deal with MLS as an opportunity to experiment with a direct-to-consumer business model.
MLS currently sells a package of games that can be watched on TV through cable and satellite operators for $79 per year, or an Internet-based package of these games that costs consumers $65 a year or a monthly charge of $16. "You saw us buy MLS digital rights,” Skipper said. “It was a clue, but we still don't know what we will do with that. That's a direct-to-consumer package we bought. We could do it just like it's done now through multichannel distributors or we can do something different with it to go direct to consumer," he said.