ESPN and Cord-cutting or Disney’s Dark Fairy Tale

The Walt Disney Company has a complicated history with copyright. Disney has long taken inspiration for its movies from the public domain. Fairy tales, fables, Shakespeare, you name it, Disney has borrowed it. Disney has continued the age old practice of building on the work of others. There is no shame in this, it’s the natural progression of art, science, engineering, law, math, everything. That’s how society evolves.

Copyright, along with patent law, dates back to the founding documents of America (and the concepts predate immigration across the Atlantic) and is designed to serve as an incentive for creative works. The idea is that by issuing a limited monopoly, the state can encourage citizens to write, invent, paint, sing, and compose, recoup their investment and make some profit, and then gift their work to society. Copyright law is designed to encourage the greater good. Not be a barrier to protect the rights of artists against the public.

The Wall Street Journal on Monday published an article outlining an interview with ESPN President John Skipper discussing the cord-cutting revolution and ESPN’s reluctance to embrace internet content distribution unpaired from a cable or satellite (pay-TV) subscription.

“Though the company has internally considered a stand-alone broadband offering, “it’s not close yet.”

Mr. Skipper told the paper that a version of ESPN untethered from a cable subscription isn’t close, but in the age of Netflix, this is a surprise. Shouldn’t ESPN be close but not offering the product, perhaps, like HBO and HBO Go, trying to warm up the cable providers to the idea?

ESPN, like parent Disney, and recently, Disney property ABC, requires uses link their online or portable device with their traditional cable account. Signing in is a relatively painless process, but it means that for those who do not have some form of pay-TV, there is no online alternative.

For ESPN, a cable channel, this is unfortunate. With the success of MLB.tv, many sports fans would gladly free themselves of the channels they currently pay for and don’t watch to gain access to an online portal of ESPN content. Already, on the WatchESPN app, a greater amount of content is available – many college games for example – that don’t show up on the TV ESPN channels are available to stream over the internet either live or from an archive. Right now, ESPN wants to protect their current deals with the cable operators, not viewers, making payments.

It’s a similar strategy to that being taken by the NFL and Major League Baseball against Aereo: the threat of putting more content behind a paywall. Rather than broadcast games on free, over-the-air television, the leagues have indicated they would prefer to alienate some viewers and become cable-only rather than let the alternative antenna service provide customers with a feed of the game acquired in a, currently, legal manner.

Sure, live sports is an anchor that keeps people subscribing to cable tv. Right now, it’s compelling even if frustrating, but the same sports leagues that are retreating to cable don’t have much further to go before just selling directly to the consumer. Disney is in a unique position having so many iconic and powerful brands (Pixar, ABC, ESPN, Marvel, Star Wars, etc.) that it can leverage to move customers anywhere along the content spectrum. Netflix in 2016 will become a very nice home for many of their properties.

For the same hundred dollars a month minimum buy-in for a cable & internet package, consumers might start spending fifty dollars on internet and ten dollars per month on the three services they choose, perhaps even alternating when a new Game of Thrones (or whichever show is popular and offered in the right format) season debuts.

The cord-cutting revolution may have started before 2014, but the first big battles could well be fought this year as the hardware, software, and services are reaching past the domain of the technically inclined and arriving in living rooms in the form of a Chromecast, AppleTV, gaming console, and mobile devices. With a tap on a touchscreen, television content is at your literal fingertips, with barely a thought to the cable company.

Reading The Road Ahead 19 Years Later – Chapter 4: Applications and Appliances

Thirty years ago the United States Supreme Court decided that personal recordings were fair use and that selling a device (the VCR) that has substantial non-infringing uses is lawful even if it could be used to infringe. In chapter four of The Road Ahead, Bill Gates pondered the digital future and the evolution of computers.

As he saw the VCR invented during his lifetime, Gates predicted a host of new time-shifting devices that would interface with the Internet, his “highway.” While Netflix is almost taken for granted these days, serving up pre-existing as well as new content “on demand” in 1995 was still a technology somewhat out of science fiction.

Even four years later when Quest aired a commercial featuring a fictional motel that offered “every movie ever made in any language anytime, day or night” the dream of unlimited on-demand selection was still futuristic.

[youtube https://www.youtube.com/watch?v=xAxtxPAUcwQ]

In 1999 the top DVDs for sale on Amazon.com were The Matrix, The Blair Witch Project, and Titanic. This was the start of the DVD era as people just began to adopt the home theater crazy. The Matrix itself pushed many to adopt DVD as their home movie format rather than VHS, but in a world just beginning to exit dial-up speeds, streaming a movie was still a ways off.

Although the market for a book written by Bill Gates in 1995 was obviously going to lean heavy on the technology crowd, his explanation of how this on-demand system would work is telling:

Movies, television programs, and all sorts of other digital information will be stored on “servers,” which are computers with capacious disks…The requested data will be retrieved from the server and routed by switched back to your television, personal computer, or telephone—your information appliances.

In 2014, no one needs to explain what a server is and even if the “person on the street” doesn’t understand exactly how the cloud works, s/he understands the relationship between offsite and onsite data storage.

What continues to be impressive in The Road Ahead is Bill Gates’ understanding of where technology will go over the course of twenty years. Considering the beliefs about the imminent arrival of cold fusion, flying cars, and household robots over the past fifty years, and how so many new companies have emerged to offer the new technologies he anticipated, this is an impressive amount of understanding.

There are some misses…

One new form [of display] will be the digital whiteboard: a large wall-mounted screen…[that] will display pictures, movies, and other visual materials, as well as text and other fine details.

…but overall the 1995 version of Bill Gates would fit in well in 2014, although there may be less Microsoft in people’s lives than he would have anticipated.

The wallet PC, essentially the smartphone, was described a pocket computer that would replace wallets, provide a connection to the highway, and act as a Swiss Army knife for the digital world.

What do you carry on your person now? Probably at least keys, identification, money, and a watch. Quite possibly you also carry credit cards, a checkbook, traveler’s checks, an address book, an appointment book, a notepad, reading material, a camera, a pocket tape recorder, a cellular phone, a pager, concert tickets, a map, a compass, a calculator, an electronic entry card, photographs, and perhaps a loud whistle to summon help.

Outside of identification, which has not yet reached the realm of the phone for higher levels like government ID (but has for many forms of tickets), the rest of the bag of tricks can be handled with a smartphone and nothing else, depending on where you spend your money. With Apple, Google, and the cellular carriers all trying to gain a foothold in mobile payments, it might not be possible to spend money only using a phone, but an ID, credit/debit card, and phone is a realistic set of things to leave the house with and not have to worry.

There was actually some good timing that went into this post: news about Microsoft’s Siri and Google Now competitor, Cortana, was released just a few days ago. As the third major mobile OS player, this was an area Microsoft needed to get up to speed in to remain competitive feature wise. However, as with tablet computers, which Gates and Microsoft pushed commercially for nearly a decade before the iPad made them popular, the virtual assistant is ground they covered in the past.

Gates anticipated the omnipresent intelligence of Google Now in the wallet PC for travel: “It will monitor digital traffic reports and warn you that you’d better leave for an airport early, or suggest an alternate route.” And he had it for voice command questions: “You might ask, ‘Where’s the nearest Chinese restaurant that is still open?’” but at the end of the day, he imagined something more like the Star Trek computer. Gates imagined an electronic companion you would talk with as a specific source, like an individual. In 1995, Gates termed these digital assistants “agents.”

An agent that takes on a personality provides a ‘social user interface.’

The character will disappear when you get to the parts of the product you know very well. But if you hesitate or ask for help, the agent will reappear and offer assistance.

Yes, Microsoft has been working on agents for years. Microsoft Bob was one. Clippy was another.

With Cortana, Microsoft will not be bringing Clippy to the phone. Hopefully. More likely, Microsoft will finally produce the agent that Gates imagined so many years ago. Voice recognition took longer than anticipated to roll out, but it’s here now, and it’s pretty good.

For Bill Gates, like Steve Jobs, the PC in 1995 was on the path towards becoming an appliance. As of 2014, this is truer than ever before, although the true computing appliances aren’t the desktops and laptops but the phones, tablets, and set-top boxes. Chromebooks have turned the laptop market on its head as a computer that looks traditional but acts like a new concept. As HP said in an ad campaign, “the computer is personal again.” Or with new functions, controls, and interfaces, it’s more personal than it’s ever been.