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Cord-cutting is becoming a self-fulfilling prophecy

By John McDuling

The jury’s still out on how big a trend cord-cutting really is. But the future for Americans who have, or want, to cut their cable cords, abandon their pay-TV subscriptions, and consume content solely via the internet keeps looking brighter.

The latest content that could soon be available online without a pay-TV subscription comes from the NBA, which struck a gigantic $24-billion broadcast deal with ESPN and TNT this week. As part of the deal, ESPN, according to the Wall Street Journal (paywall), is working with the professional basketball league to develop “a new online video service that would show live regular season games” and will be “open to people who aren’t cable or satellite-TV customers.”

That would mean that all of America’s four major sports leagues will soon make a significant share of their content available over the internet without a pay-TV subscription:

  • Major League Baseball’s extensive online service gives access to all games for “out of market” teams (i.e. not the local team in the city where you live). MLB Advanced Media’s CEO Bob Bowman told me earlier this year that he was hopeful these “blackout” restrictions on local teams will soon be removed.
  • The NHL offers a similar service to MLB.
  • NFL games, on Sundays at least, are also available over the internet, but admittedly via a pay TV company (DirecTV) and only if you live somewhere where you can’t get DirecTV’s full satellite service.

As Re/Code’s Peter Kafka pointed out, the NBA already has a “league pass” that offers subscribers access to “out of market” games. It remains to be seen whether the ESPN service, which Kafka says probably won’t actually go live for another two years, will just be a rebrand of the NBA product, or something more comprehensive. A spokesperson for ESPN declined to elaborate on its plans for the service when contacted by Quartz.

The Disney-owned sports behemoth makes most of its money from carriage fees from pay TV companies, and has long resisted making its content available over the internet without a pay TV subscription. The recent experience of the WWE, which attempted to do just that, explains why. That ESPN is now exploring an online-only option with the NBA is therefore hugely significant.

The reasons to take out a full pay-TV subscription are rapidly diminishing. Streaming services like Netflix (or Hulu and Amazon Prime) and video-on-demand services like iTunes or Amazon Instant Video are often enough to satisfy most people’s dramatic content needs. HBO still requires some form of pay-TV subscription, although it looks like this might soon change (a lot of its older series, but not Game of Thrones, are available on Amazon Prime). Showtime has also signaled that it soon may offer an “over-the-top” service.

The cable companies are slowly becoming infrastructure-focused businesses. They already have more broadband customers than video customers. Industry dynamics suggest this is only going to continue.