Full Circle

June 16, 2010 – 12:01 pm

Imagine if: The wrong path

With the World Cup in progress, I’ve seen more discussion about ESPN’s “360″ subscription model, (now called “ESPN3“) and we’ve seen one or two requests from customers that Sonic.net subscribe to ESPN3 for all of its customers.

However, I have real concerns about what ESPN is attempting to do. I do not believe that we should accept a model that attempts to duplicate Pay TV on the Internet.

Doing so would be a U-Turn away from the open Internet.

With Pay TV, when you subscribe to a package of cable channels, the carrier pays a few cents to a few dollars for each channel or group of channels, and from that builds a set of channel line-ups.

À la carte television has been talked about for years, but the linear/bundling model has been an unbreakable one in television due to the hold that content creators have over how their content is delivered. For example, if carriers want one channel, they may be forced to take others along with it (this is why you have all those shopping channels.) And, channels often come with restrictions – they must be grouped together, they must be in the lower X number of channels, etc. These restrictions end up dictating what can and what must be in each tier of Pay TV service. (Read: Wired, Where’s My à la Carte TV?)

The Internet should not accept this model. If it were carried to its logical conclusion this model would have every site charging the ISP, who would pass on the costs to all customers, whether they want the content or not. You would end up with a fragmented Internet experience, and paying for content you do not want.

Today the Internet is “à la carte”, and it should remain that way, with neutrality protection for both content providers and connection providers. End-users should be empowered to subscribe to the pay services that they themselves choose, rather than being forced to pay for services they may not want. Successful examples of this include Netflix and Pandora, with Hulu headed this way as well.

As we move to an OTT video world, lets not drag the old Pay TV model with us.

For more on moving to OTT, see the great guide from PBS: Your Guide to Cutting the Cord to Cable TV and for ongoing advocacy for a la carte, follow on Twitter: TV A La Carte.

(A note regarding the attached image: this illustration imagines a future where Internet sites are bundled into tiers of sorts – the ESPN3 model is even worse than this – all users pay, across the entire ISP.)

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  • Arthur

    I agree. If I wanted ESPN3, I should be willing to pay for it. If I don’t want ESPN3, I don’t want to be paying for it.

    Many content providers have found that charging for content by subscription reduces viewers of their advertising. So they actually make more money opening their sites to all viewers, and get more advertising revenue.

    ESPN3 doesn’t like that model and wants to strong-arm ISPs into buying access in bulk. Just say “no!”

  • Ralph

    I am not sure I fully understand this explanation. Are you saying that you don’t want to pay for ESPN3 because not every subscriber to Sonic.net wants it? Are you saying if Sonic.net accepts ESPN3, they have to accept some other content as well? Are you saying that if ESPN3 makes you pay for it in bulk, you cannot figure out a fair pricing model for your customers who do want it?

    I simply don’t believe that only one or two of your customers want this service. I think you are stacking the deck with that comment. I guess that would be just me and Arthur above. That’s absurd.

    Somehow, in the last month, I have been getting ESPN3. Your tech people tell me that I must have been picking it up off of a neighbor’s wireless router. (That concerns me for security reasons). However, it was terrific.

    I do not subscribe to cable or any television service. I used to get limited tv reception until they changed everything to hd. I happen to agree with you about the cable bundling practice and the avarice and lack of service from the cable companies.

    I subscribe to Pandora because I don’t want to see all the ads and it is worth it. I would subscribe to ESPN3 as well if there were a reasonable fee for it like Pandora’s. I also subscribe to Netflix.

    You probably experience few requests for ESPN3 because people simply watch television. Too bad. When I was getting ESPN3 somehow, I had just what I wanted—sports and nothing else.

    In principle, I agree with your arguments. In practice, I now really miss ESPN3—especially since I can’t watch USA-Algeria while I am working.

    What are you actively doing to promote your philosophy and provide a better on-demand model via the internet?

  • http://www.sonic.net/ Dane Jasper

    Ralph,

    I agree that there are likely to be many customers who would love to have ESPN3 access, but if we were to poll all customers and ask “will you accept a rate hike of $1/mo”, I doubt we would get a majority to support that.

    My point is primarily that like Pandora and Netflix, which you cite, ESPN should allow individual subscribers to opt into the service, rather than attempting to make ISPs charge all customers for the service whether they want it or not. Carried to it’s logical conclusion, if every service like ESPN goes this way, the cost of Internet access would go up for all customers.

    As for what we are doing to promote the on demand and per-user model, I think taking a public stance against ESPN’s blanket “charge all subscribers” model is a good start. I also hope that building a large fast network that can delivery the highest possible speeds to end-users will enable and encourage OTT delivery. As an access provider, this is our primary role; build a big pipe, and get out of the way!

    -Dane

  • Anonymous

    I also noticed, like Ralph, that Sonic.net was providing access to ESPN3 up until today — when the really interesting World Cup games begin. Was that a technical glitch with unfortunate timing, or was it perhaps some kind of bait-and-switch strategy by ESPN, to encourage your users to feel the pain and complain to you? Either way, I understand your reasons and applaud your effort to stand up against this dangerous trend.

    Anyway, if it’s possible, here’s a vote for paying ESPN just for this next month. Can’t we work this out later? :-)

  • Ralph

    Thanks for the thoughtful response Dane. I am a little confused by this paragraph:

    “My point is primarily that like Pandora and Netflix, which you cite, ESPN should allow individual subscribers to opt into the service, rather than attempting to make ISPs charge all customers for the service whether they want it or not. Carried to it’s logical conclusion, if every service like ESPN goes this way, the cost of Internet access would go up for all customers.”

    Was the “logical conclusion” following the Netflix/Pandora model or the “charge everybody $1″ model? It’s a little ambiguous here.

    In either case, an individual’s internet cost will rise. It will rise less with the Netflix/Pandora model. In this case, I do not see any problem with it rising. I believe you should pay for content. The concept of “free” content vis-a-vis television is actually a deep and serious problem within our society. Expecting something for free is both unfair and foolhardy. Deceiving people that they are getting something for free when all the science proves that they spend more money as a result of all that “free” advertising is inherently dishonest and manipulative. The fact that some movie theaters are now forcing customers who “subscribe” to two hours of content to also watch advertising is both despicable and a natural development of the avarice behind content distribution.

    While I applaud your corporate strategy of building a large fast network that is competitively priced, you have made a content management/delivery decision. It is not a non-decision, it is a real action that belies the simplistic notion of building a big pipe and getting out of the way. A major content provider has forced the issue and you made a decision.

    Your “public stance” is pretty passive and convenient. My comment about taking an active role was more to the point that you do something like negotiate with ESPN to provide their content only to subscribers who were willing to pay for it and base revenue sharing on that. You would then be the intermediary who provided a Netflix/Pandora like solution for your customers—who want it.

    I am quite sure that ESPN is difficult to negotiate with. However, your customers, like me, are at the mercy of your decision, your action. Not buying into ESPN’s current model does little to affect the status quo. Providing leadership for a superior model for your customers could really help the internet and its implementation.

    Is that two cents worth or maybe a little more?

  • Simon Huynh

    This is terribly terribly sad for me. I’m really happy about Sonic internet’s service and have been delighted these past few weeks, during which I like Ralph have also inexplicably had access to espn3.com, but reading this blog just makes me sad knowing I now can’t watch the World Cup because of net neutrality principles. Really really sad.

    I realize that ESPN’s model is crummy and threatens the future of net neutrality by making ISP’s decide on an all-or-nothing service experience for their subscribers, but the current alternative to ESPN3 is DirecTV, Comcast or AT&T U-verse, meaning that in the name of net neutrality us Sonic customers are being pushed into buying into an even larger content/media cabal. Like Ralph, I agree with your principles but wonder if as a smaller service provider with a minority market share this is the best place to take a stand or the best way to promote the OTT model. The practical alternatives don’t help your cause, really.

    By the way, I spoke on the phone with Jasper about this earlier. Thanks for getting back to me, and keep up the great customer service!

    Simon

  • Ralph

    Well, Simon’s post is quite interesting. So, there is another customer who inexplicably enjoyed access to ESPN3. When I questioned the Sonic techie about that, he told that I must have gotten it by being on a neighbors network. That was very disconcerting and now I believe an uninformed response.

    I am a software and web developer. I am careful about my network security and so are my neighbors. They do not have open networks and mine is not either. So, I believe that guesswork was lame and incorrect.

    I can offer another theory that I would bet holds more water than his theory. ESPN allowed Sonic.net users access as a ploy to get them hooked and demanding their service. Just a thought. The corporate world is easily capable of such deviousness—in fact, practices it.

    Regardless of what is actually true, I have to say that I share Simon’s sadness and it is not just over the World Cup. I loved watching the World Cup and I was able to do it while working. But I also love some of the minor and college sports that ESPN3 broadcasts. I greatly appreciate the variety of choices they offer at any given time. I have watched NBA finals games, college softball games, college baseball games and World Cup matches. It was fantastic.

    So, Dane, quickly we learn that there are now three—not just one or two as you stated—customers who want this service. My bet is that there are a whole lot more that would really appreciate this service, but you don’t want to admit it. That makes me wonder if ESPN might have thought to demonstrate to you the popularity of their product.

    My challenge to you Dane, as I put it before, is to take an active role in providing this service in a way that supports your ideals of net-neutrality or whatever. I am a loyal sonic.net customer and have been for many years. I even had Comcast installed simultaneously for awhile and removed it. However, if you are going to sincerely fight for some principle at the expense of your users’ experience, I might have to reflect on my commitment as I reflect on yours. $1/month (your statement) is less than I pay for Pandora or Netflix. I rarely us Pandora any more but still pay for it.

    I think you have built an excellent company and product but would encourage you to rethink your position here.

  • http://www.sonic.net/ Dane Jasper

    Ralph,

    Yes, it’s certainly possible that ESPN simply didn’t restrict access for some period of time, that certainly makes sense.

    And yes, I know that many customers would love us to carry ESPN3, my assertion is that the majority would not want to pay for it via a price hike. It would be valuable to you at $1/mo, but many customers wouldn’t want to pay extra for something they would never use.

    ESPN3 itself might be innocuous, and in itself it might even be affordable. While I’ve heard that smaller ISPs pay $0.35 to $1.00 per customer, I’ve also heard that large ones pay as little as $0.05. That’s arguably “affordable.”

    The challenge is what happens next. MTV launches a similar licensed product, and requires $0.10 of every ISP. Then VH1 does the same (for only $0.01 of course!). Next Google itself asks for a dime for every customer.

    Where does that end? Do you as a consumer really want to pick and choose your access provider based upon a broad menu of Internet “channels” that they subscribe to on your behalf? How does that go for consumers only served by one or two ISPs, as is the case in much of America.

    I don’t believe the model is sustainable in the grand scheme. It’s the open nature of the Internet that has led to its success, and ESPN’s ISP licensing attempts to get us all to sell out our values for their desirable content. But it is a slippery slope, and one I don’t think we collectively should go down.

    I believe consumers should insist on buying a big pipe for a good price – and they should insist that they can access all Internet resources over it. Just as we should not slow or block a service like VoIP or video or P2P, we should not force customers to pay for content they do not want by becoming a troll under the bridge for the content providers.

    -Dane

  • http://www.sonic.net/ Dane Jasper

    I read that Univision is providing all of the World Cup content at no charge (ad supported.) FYI.

  • Ralph

    Is that television or some type of internet access?

  • http://www.sonic.net/ Dane Jasper

    Univision is both a television network and is broadcasting the World Cup on the Internet. Here’s a URL – give it a try in the AM when the games are on:

    http://futbol.univision.com/fifacopamundial/partidos-en-vivo/index.jsp

    Note: announcers are in Spanish.

  • Ralph

    I must object to some of your wording Dane. I am not selling out any of my values by paying for ESPN content. I also think that you are playing word games with your arguments. The “what if?” scenarios like the Google comment are really and truly weak.

    You are not the moral gate keeper for the internet. You are an ISP with the opportunity to provide attractive services to your customers. I believe you have an obligation to do that in whatever way you see fit that makes business sense and is fair to your customers. I pay extra on my monthly account for enhanced speed that other customers don’t pay. I am willing to pay for other services as well.

    Some faux-noble argument about the future and its infinite possibilities is simply an attempt at justifying your position.

    It’s your company Dane and you make the decisions. You hold the stick. I believe the case you make here for your position is seriously flawed. There are many small isp’s all over the country who provide access to ESPN3.

    I subscribe to Sonic.net because you are local and you provide outstanding support. Your technical people are local, American and speak understandable English. They are knowledegable, sincere, and helpful. That is quite valuable.

    I have worked with and on the internet since 1987 at Yale University. I have a degree in Philosophy. I understand arguments. I was Sr.VP of an internet content aggregator that bought and sold content.

    As I mentioned a few times, I am willing to take the responsible position of paying for content that I like and want. You have decided to deny me that option. For you to suggest that I am selling out is egregious and self serving on your part.

  • Ralph

    Thank you for the link to Univision. Unfortunately, I don’t speak Spanish. Don’t understand it either. Still, a nice gesture.

    What do I do for the college sports and minor sports that I like?

  • http://www.sonic.net/ Dane Jasper

    Ralph,

    Sorry for the wording, I should take responsibility for the position. I feel like I would be selling out our customers if I signed up with ESPN and passed the cost on to all of them.

    I don’t stand in the way of customers choosing to pay for content, but I don’t believe that ALL customers want to pay for this content. ESPN has chosen to adopt an “all or none” model, and I do not believe that is fair to Internet users.

    As for my example of others adopting the same model, perhaps the Google example takes it a bit far, but where should the line be drawn? Why wouldn’t others (MTV for example) go down this path? Do you see that as a desirable direction for content on the Internet to go?

    -Dane

  • Ralph

    Aaaagh! Thank you for that response. I was little nervous when my computer suddenly lost its internet connection. I called tech support and they told me that you would never do that.

    I have to run now. This is a compelling conversation and I want to answer your question about paying for content. There are definitely types of content I believe that people should pay for. The most profitable internet enterprise is pornography that many people, mostly men pay for. The New York Times has announced that it is going to start charging for content access sometime in the near future. I already pay for content at WSJ. Yes, I believe that paying for certain types of content is actually the most fair model.

    The internet was not developed for the general public to have unlimited free access to everything including content that requires resources and money to develop. The internet was developed by DARPA for the exchange of ideas and information amongst universities and research institutions. Vint Cerf, back in the day, railed against commercial exploitation of the internet.

    Do you believe companies that develop valuable and desirable content should have to deliver it for free on the internet and should have to sell their souls to advertisers in order to maintain their business operations? Do you believe that I should have to watch advertising in order to watch the content I want even if I am willing to pay for it?

  • http://www.sonic.net/ Dane Jasper

    Ralph wrote: “Do you believe companies that develop valuable and desirable content should have to deliver it for free on the internet and should have to sell their souls to advertisers in order to maintain their business operations? Do you believe that I should have to watch advertising in order to watch the content I want even if I am willing to pay for it?”

    No, no, of course not! I believe that content providers should allow you to buy their content – but not force ALL users to pay for it even if they do not want it.

    -Dane

  • http://www.sonic.net/ Dane Jasper

    Anonymous wrote: “I also noticed, like Ralph, that Sonic.net was providing access to ESPN3 up until today — when the really interesting World Cup games begin. Was that a technical glitch with unfortunate timing, or was it perhaps some kind of bait-and-switch strategy by ESPN, to encourage your users to feel the pain and complain to you?”

    No idea about this – ESPN limits viewing by IP, and my guess is that they didn’t limit viewing until today. Odd – but your point is well made, they may be attempting to create demand by giving everyone a peek.

    Anonymous wrote: ” Either way, I understand your reasons and applaud your effort to stand up against this dangerous trend.

    Anyway, if it’s possible, here’s a vote for paying ESPN just for this next month. Can’t we work this out later? :) ”

    LOL. I would guess ESPN’s offering is a long term contract for fees for every user. Meanwhile, Univision perhaps?

    Here’s an idea – Ralph, take note. Can anyone find a radio broadcast of the commentary of the games in English? Stream that, while watching on Univision (with the player muted)! Spanish -> English, w/video! =)

    -Dane

  • Ralph

    I really only have a minute to respond here until tomorrow. However, you could use tabs in a browser, log into (of all places) ESPN radio, tune into the match, go to a new tab and go to Univision for video while muting the sound.

    Workaround. Works, but does not address the basic issue.

    I still disagree with your logic about people paying for what they don’t want. It is a product design issue and many products have features that not every uses or wants. You have a closed mind on the issue. You don’t really know how many people would want it and how many wouldn’t. Plus, you have not addressed the issue of pricing from ESPN so that only those who want the service pay for it. That is a valid model.

    BTW, is absolutely has to be that someone, not sure who, did a bait and tempt thing with ESPN3 access. I tried to get it months ago and got the current error message that appeared suddenly again today—just in time to miss the US-Algeria match. For the past three or four weeks, it has worked. This was no accident and I was not on somebody else’s network.

    Mañana.

  • Ralph

    Actually, it looks like you did address the “all or none” issue with respect to ESPN. I guess then the question would be, “are they intractable?” Do you have anyone on staff persuasive enough to negotiate a better position?

    Please keep in mind that it isn’t just the World Cup that is at stake. ESPN broadcasts college and high school sports that are much more interesting than professional sports and there is very little access to this.

  • http://sonic.net/support/ John Fitzgerald

    With the vuvuzelas blaring over the heavily-accented Scots play-by-play man, I’m not sure that Univision represents a loss in commentary quality.

  • http://www.sonic.net/ Dane Jasper

    Ralph,

    The idea of only laying for the customers that want the feature would be great, and I would be open to being the collector of that fee. But that is not ESPN’s model. ISPs must pay for all users, per user as a headcount, whether they want it and access it or not. This is the core issue, they are trying to make all Internet users at all ISPs pay for their content, want it or not.

    -Dane

  • Ralph

    OK. I understand that part. What I am trying to say is that every product in the world has features that some customers don’t care about. Extra cup holders in a car, or automatic transmission, or xenon lights. Voice activated controls. Every customer pays for features that don’t really want or need. I don’t really use many of the features on my iPhone but I like the phone anyway and I paid for those features.

    ESPN is simply a vendor to you–a supplier just like the supplier of the camera on the iPhone— and you don’t like their pricing model, so you are not going to provide their product to your customers. In order to assuage the feelings of your customers who do want the service, you make it a big issue of principle.

    As I mentioned before, I am experienced at the executive level of small and large corporations. I worked as an executive for a hot dotcom company led by a very cynical and dishonest 29 year old. I have also worked with other very honest execs and in either case, certain decisions are not easy.

    Since I don’t know you, I really don’t know what to think. I do know that you could simply say, I am going to eat the per user charge for ESPN3 and reduce my profits slightly while providing a better product overall. I hate the ESPN guys and their model, but that happens. Or you could say, 1 in 5 people really want this, so for those who want it, I will put a filter on the service so that only they will get it and I will charge them 5 times the per user price. Their are a lot of alternatives.

    From re-reading your posts, I just feel like you have this very personal issue that is beyond a principle—it is a personal battle and it affects your customers. You are tilting lances at windmills and your customers pay for it.

    The internet was built on taxpayer money. You are building a company that is profitable and successful. You, personally, as CEO, will benefit greatly from that. You are fighting a trend based on your personal convictions.

    ESPN is bullying you and they made a slick move to enlist the support of users like me. I really like their service for sports, for far more than the temporary thing called the World Cup. The two of you fight it out and I lose.

    Fair enough. I am just the customer. Wave your flag, blow your horn, charge into the fray. You have built a good company and I applaud you for that.

    I look at the list of ISPs that ESPN provides and see many ISPs of seemingly small and regional character. They have made a different decision, but I live here. At least I got the opportunity to argue.

    Pandora and the others you mention are small companies who built their model on the fact that they needed customers. If they get really big, they will change their model.
    ESPN has to pay the costs for providing all that coverage of many different sporting events. They built a pricing model to cover their costs.

    Clearly, I am not naive enough to believe that ESPN executives are saints. So, St. Dane, thanks for the opportunity for a conversation. I think making it open and public is very commendable and courageous. You think you are right. I think you are wrong. It is what it is.

  • lessthanjoey

    For what it’s worth I am a Sonic.NET subscriber who is wholeheartedly with Dane on this topic.

    While I would love to see ESPN3 during the World Cup I don’t want to be suckered into paying for all sorts of stuff I don’t want. Cable networks have done this forever and it’s why I don’t use them now – I’d happily pay $10-20/month for HBO but I don’t want the other 500 channels for another $30-50.

    The car/cupholder analogy is flawed – there’s really no other way to build a car. Dane here is pushing for a different way to sell internet content. The frustration should be directed at ESPN who are strong-arming small ISPs like this – NYTimes and other content providers are free to individually charge people but choice of ISP should always be independent of their “channel list”.

    Bravo Dane, Bravo!

  • Ralph

    The cupholder, voice activated whatever, automatic transmission, xenon headlights feature list argument is not flawed. It is exactly how it works. Product marketing determines which features are going be in the base price. Some guy decides that 2 cupholders are enough and another guy decides you need six. If you buy car A, you get 2 for your money. If you buy car B, you get 6 for your money and you have no say in either case. There are infinite ways to build a car. Do you want 6 cylinders, 4 or 12? Do you want turbo? Marketing people make these decisions for you just like Dane has.

    I guess the thing that amazes me is your presumption that you are going to be suckered into so much “other” stuff. Of course, you exaggerate, as Dane has done, the horrific effect of being “suckered” in.

    I don’t subscribe to Sonic.net because of its features. I used to use their email and web hosting which were not very good products. So I stopped using them. However, their service and support are superior. This is why I have stayed with them for so long.

    I agree that the ISP should be neutral with respect to content, but life has turned out to be not that way. The game is not the ideal thing we would like. Gosh, how unusual.

    Dane has made a decision that his customers cannot have ESPN3 because ESPN decided that Dane has to comply with there pricing policy. They are both responsible. Both.

    Why does it have to be that I can’t get certain content because the CEO of my ISP and the marketing people at ESPN can’t reach an agreement? Are they embattled because of egos? Probably, but who knows? You certainly don’t, and I don’t either.

    It is easy to imagine a scenario where both sides could compromise. It is generally the case in business that when one side or the other starts riding a white horse around the parking lot that its an attempt to justify failed negotiations.

    You wouldn’t happen to be Dane’s first cousin would you? Some people pay for bluetooth in the car that will never, ever use it. They think it is the simple act of talking on the phone that distracts you from driving, whether it’s hands-free or not. But, they have to pay for the bluetooth in the car they buy.

    I still believe that Dane’s arguments are off base for more than one reason. By the way, the World Cup, as I mentioned, is not the driving force behind this. ESPN3 is much more than the World Cup.

  • lessthanjoey

    Cousin? Not at all actually.

    It’s currently only that way with ESPN3 (off the top of my head). You’ve provided many counter-examples of the opposite: Netflix, Hulu (soon to be), NYT, every pornography site — they all let customers decide whether they want that service. Capitulating to ESPN encourages others to go that path and ultimately screws consumers.

    Do you disagree that cable would be better if you could pay for the channels you wanted a la carte? The internet is primarily already this way and ESPN is trying to change it to the Cable TV model. I’d like to see them fail at that (as much as I’d like to watch their world cup broadcast online).

    I think the area where we disagree (and where you disagree with Dane) is

    “I agree that the ISP should be neutral with respect to content, but life has turned out to be not that way. The game is not the ideal thing we would like. Gosh, how unusual.”

    How are things going to turn out how we actually want if we never make a stand? Given that most of the pay content online *is* being done the way we want, I don’t think you can say life turned out to not be that way. ESPN turned out to not be that way but let’s not give them further encouragement!

  • Pingback: CableTechTalk » Blog Archive » You Say You Want a Revolution

  • Ralph

    The conspiracy theory with respect to ESPN trying to change the internet model is absurd. They have a marketing department who decided that this was the best way for them to make money. This exemplifies the “white horse”-Chicken Little-Don Quixote argument (not to mention the weapons of mass destruction). OMG, we must take a stand. How about a pre-emptive strike against ESPN?

    I am disappointed that my ISP won’t allow me to watch ESPN3. Tough buns, huh?

    It’s about business and the “taking a stand” stuff in the name of whatever, is just that—stuff.

    Sorry Dane, but you are either now or will be a very wealthy man because of your business enterprise. I do not believe that you are the “champion” of fair pricing on the internet. Maybe I will believe that if I ever see you in Congress fighting against AT&T (who must now be your business partner), Comcast, and other big time greed merchants.

    Thanks everybody for your input and allowing me mine. Best wishes.

  • http://www.sonic.net/ Dane Jasper

    Ran across a few live sports and World Cup resources, YMMV:

    World Cup live games and schedule:
    http://j.mp/a3NTSS

    ATDHE live sports:
    http://j.mp/bljUdO

    Finally, we have a special “World Cup” version of the Sonic.net home page:
    http://j.mp/d8Sarg
    :)

    -Dane

  • Ralph

    Hmmm. Well. This is a lot more interesting than I thought. Someone posted the CableTechTalk blog post and I read it. Fascinating. It ended like this:

    (Even Lauren Weinstein, at the Network Neutrality Squad forum, acknowledges that “the concept of purely ‘a la carte’ programming (regardless of the delivery mechanism) carries with it the risk of a ‘race to the bottom’ of lowest common denominator programming that will appeal to the most people.”)

    Consequently, I have a knee-jerk visceral reaction when I read things like this: “I’m thinking something bigger — like tens of thousands, maybe hundreds of thousands, or even millions of customers canceling their subscriptions or deciding not to pay their cable bill, meanwhile educating each other on how to find other ways to get the same programming.”

    But you can’t duplicate your cable line-up online for free. Not yet. And I have difficulty seeing a future in which you will.

  • Ralph

    We can be proud that we weren’t part of the notorious group:

    The United States soccer team’s dramatic victory over Algeria was followed by a record number of people online and on mobile devices.

    ESPN said 1.1 million people watched at least some of the USA’s 1-0 win as it was streamed on ESPN3.com Wednesday. The match, which was also watched on ESPN by 6.2 million people, lasted from 10 a.m. to noon ET, during working hours for most of the United States.

    Oh well. Thank you Dane for the links. Funny vuvuzela page.

  • Simon Huynh

    A few thoughts:

    - I think this back-and-forth speaks volumes about the degree to which Sonic.net appreciates and considers its customers’ opinions. I applaud you for that, and you Dane for taking the time to discuss this. This is a great example of why I’m a loyal Sonic customer and not seriously considering switching providers despite being really bummed about not getting ESPN3.

    - Thanks for the Univision link – just in time for me to catch Paraguay-New Zealand yesterday!

    - I think Ralph has a seriously worthwhile criticism here, though maybe the message got scrambled a bit in accusing lessthanjoey of being Dane’s cousin. A fundamental part of this back-and-forth is that, Dane, you have a dissatisfied customer who has been denied a product feature that can be found elsewhere, and that customer (Ralph, though go ahead and include me in there too) is dissatisfied with your reasons for not providing that feature. This I think should be taken seriously. It is not enough to say:

    “I agree that there are likely to be many customers who would love to have ESPN3 access, but if we were to poll all customers and ask ‘will you accept a rate hike of $1/mo’, I doubt we would get a majority to support that.”

    because that only vexes the people who do want it. If your reason for not providing it is because of customer opinion, than go ahead and poll your customers on your homepage or in a newsletter or at least do some minimum due diligence so that this statement becomes a matter of fact and not just executive opinion.

    - That said, I realize this company is not a democracy. However, there are democratic ideals that Dane is admirably striving towards here. Obviously this open discussion is great starting place. The deep concern for the direction in which ISP-paid content takes the internet seems to be another example as well. There seems to be a strain of thought here that a system in which many-pay-for-a-few is necessarily bad for the many. That is not true. Think of public libraries, public roads, public utilities, even public cable. And this is Ralph’s point writ large: the more you look over ESPN3′s offering, the more you realize this content can’t be accessed (or paid for) in any other way. ESPN3 shows high school and college sports, lower-tier matches of big name tournaments, obscure and international sports like lacrosse and cricket, and gender-slanted sports like softball. ESPN3 is like CSPAN for sports.

    - This customer’s POV: while I wish Dane well in the struggle over OTT vs ISP-paid content, I know that the next time I’m looking for an ISP, ESPN3 will be significant factor in that decision. Were I not currently with Sonic, I’d be seriously searching for a competent alternative to Comcast and AT&T (which Sonic hands-down is) but that *does* provide access to ESPN3.

    - A last plea to Dane: just pull the trigger and give your customers what they want. Take it out of the profit margins for a brief time, a short term hit in the name of doing good long-term business. Then, if it turns out ESPN3 levies an onerous fee but provides a feature we demand then go ahead and explain that when the new monthly plans getting formulated. Invite your customers to debate the OTT vs ISP-paid content business models. If there is an overwhelming “no to ESPN3″ response from your customers, then pull the plug on it.

    Thanks!

  • Ralph

    Wow. Wow. Great post Simon. Last time I saw something that thoughtful posted on a blog was just about never. I wish I wrote that well.

    My cheap shot about “Dane’s cousin” was just being silly. I really thought he was Dane’s brother. :-)

    By the way, I had no idea what OTT is until getting involved in this issue. While I can see that it is a significant issue, I would definitely second Simon’s recommendations. If you, Dane, really care about the issue, satisfy your customers while you take time for real initiative, or due diligence, with the industry and your customer base.

    (Simon, would you give me a call at 415.465.9900?)

  • http://www.sonic.net/ Dane Jasper

    A warning on World Cup video scams: http://mobile.twitter.com/dane/status/17071028685

  • Pingback: The Screen Savers: Independent ISP Survival – Sonic.net Co-founder and CEO Dane Jasper Interview | Service Internet Provider

  • LS

    I am a faithful Sonic.net subscriber for many reasons, including an admiration for the ideals that Dane and the company stand for.

    I have no interest in ESPN whatsoever, nor do I care one iota for the offensive content that the cable/satellite companies would force me to pay for in order to get the one or two channels I might be interested in.

    I’m a happy Netflix/Roku user because I think I’m getting great value for my money. If the ISP rates start going up to pay for bundles I don’t want, then I will just continue to monitor which provider would give me the best value for my money. I hope Sonic.net continues to be that ISP. Thanks, Dane!

  • Ralph

    Well, la de da. I am really sorry I can’t watch Nederlands and Brazil this morning. The links Dane sent earlier don’t seem to work. I am so happy for the white horse herd though. Oh well.

  • Aaron

    As a Time Warner subscriber (a HUGE company that agrees with Sonic.net), I found this discussion absolutely fascinating.

    While I would LOVE (!) to watch ESPN3, I wholeheartedly agree with Time Warner and Sonic.net on this issue. I love the internet for the very reason that I control what I watch/read.

    Keep up the good work, Dane.

  • http://anglersid.com Jeremy Anderson

    Do not cave-in to these ridiculous policies. Doing so is a slippery slope which will ultimately lead to the death of internet neutrality. Openness and neutrality are the factors making the internet a world-changing tool.
    Disney will eat crow on this one.
    They clearly don’t care about the real customers, the ones watching their programming. I’m boycotting ESPN and Disney, and I have told them as much. I support my ISP, Qwest, for refusing to play along with this ridiculous “business model.”

  • Ed

    Dane,

    Thank you for your position on this issue. I agree with you.

    As a long-time Sonic subscriber, I do *not* want ESPN3. There is a low possibility that I might be interested in it on an a la carte monthly basis if there’s a particular series I want to watch, but I wouldn’t want to be locked into a yearly subscription. On the other hand, I’d really like to watch NBA League Pass without its current restrictions, but that’s not possible, so I’ll just figure out another way to watch the Warriors.

    I recently canceled my DirecTV service after 10 years and I’m building my own DVR/music server. I only watch The Daily Show, Colbert Report, and 60 Minutes on a regular basis which I now watch online, albeit at low quality. I might resubscribe to DirecTV when basketball season starts this fall (at 50% off what I was paying before), and then cancel it after 1 or 2 years when basketball season ends and hopefully online TV will mature more by then. The most I would pay for each of those shows is $5 per month, for a total of $20 per month on top of Internet access. I might pay more for the NBA. I would pay less for all if there are commercials; I shouldn’t need to pay for content if there are ads. I actually like some of the ads though. I’d expect my cost should be much lower with ads.

    Additionally, I might rent or buy Planet Earth, Survivorman, and other individual series because their costs are less than one month’s worth of cable, I get to keep the programs forever, and I support the shows directly.

    Also, my mom and dad are Sonic subscribers and they definitely would *not* want ESPN3. If my brothers needed Internet service, they would subscribe to Sonic and they also would definitely not want ESPN3.

    So there’s 5 of us who don’t want ESPN3.

    Thanks!

    – Ed

  • Ralph

    This thing keeps getting messed up between the BIG MORAL issue, the personal tastes issue and business. The BIG MORAL issue is complex and, I believe, a red herring. It’s just fine with me that Ed and his 4 family members don’t want ESPN3. I can’t stand the Warriors and wouldn’t watch one of their games on a bet. So? The business issue seems to be totally ignored by these valiant folks and ESPN3 haters. It’s really simple (well, nothing in business is really simple, but that’s another issue). ESPN charges Sonic, say $.35/subscriber for its service and Sonic has to pay for all of its subscribers. Dane quite reasonably expects to recoup all costs and make a profit. So, he marks up the per user price to $.80/user. He then calculates that for every Ralph there are 9 people who not only hate ESPN3 but don’t much like Ralph either. :-) Still, Dane thinks that Ralph is a loyal customer and realizes that 1/10 of his customer base share Ralph’s sentiment. So. He, says to Ralph, and all the Ralph wannabes, I am going to provide you with ESPN3 and it is going to cost you $8.00/month. Still want it? After all, Ed is willing to pay $20/month for what he likes even though you don’t like what he likes. Wow. You mean, I actually get a choice and because of your pricing structure, poor old Ed doesn’t have to pay for my ESPN3 fix? Wow. Dane you are a great business man. On top of that, you have demonstrated that there really is not a great MORAL issue here. Fabuloso. (By that way, by selecting Sonic as my vendor, I now pay $35/month for the same service AT&T offers me for $17/month and with AT&T, I get ESPN3. Now, why would I pay that extra money to get Sonic? Well, I do.)

  • Graham Freeman

    Count me as another long-time Sonic.net customer (wow, almost $400/mo between home office, office office, and family getaway! not including the Mifi, which I bought via Sonic.net) who would prefer not to be hit with ESPN3 inflation.

    Similarly, the cable-TV pricing model is a dealbreaker to me. It’s one of the many good reasons why Comcast has never received any money from me, and probably never will.

    Thanks for the excellent post, Dane!

    Graham

  • Ralph

    Aha. So, Graham supports my model. Provide access to ESPN3 to those who want it but be sure that only they pay for. Great! Great, I am willing to pay for, Graham isn’t. As long as he doesn’t have to subsidize my choice, he doesn’t want to deny it to me.

    Or does he?

  • Graham Freeman

    *shrug* I don’t know/care who claims which model. Only the merits of the model concern me.

    My position:

    * I won’t pay for ESPN3, either directly or indirectly. I’d rather play sports than watch them.

    * The cable-TV all-or-nothing pricing model is harmful to an open society, and caters more to consumers (passive) than to citizens (active). It’d be a travesty if the internet became more like that. I’m glad my ISP is disinclined to follow that model. If they did, I’d find a new ISP. Thankfully, I don’t think I’ll have to do that any time soon. :)

    Graham

  • Ralph

    Gosh, Graham, we are still in complete agreement. I would rather play sports than watch also. I don’t know what that has to do with this conversation. I run 20 – 25 miles per week and coach a varsity high school basketball team. I enjoy watching sports as well. The World Cup has been great although I have had to watch it in Spanish.

    Plus, in my model, which also has nothing to do with cable-tv, means that you don’t pay for ESPN3 either directly or indirectly. Maybe it would be helpful to understand my model a little better. You don’t pay a centavo for me to be able to watch ESPN3. Not a single penny.

  • Ralph

    This has been kind of fun folks. But, I am signing off. For me there has been a lack of rational conversation and a whole lot of pontificating. Dane isn’t going to change his mind based on anything I say and some of you don’t even carefully read what I say.

    Spain plays Holland Sunday and will be in front of a TV set somewhere watching it. Then, in the afternoon, I will be out for a run followed by open gym with my basketball team. I am sure that a few of you will be out on the trail riding your white horses.

    I carefully read the link in the June 16th article above. The struggle between competing business paradigms is interesting, but that is all it is—competing business paradigms. If you know anything about the internet you will remember that Vint Cerf, Senior VP at Google and one of the “founding fathers,” maintained for years that the internet would never, never be a medium for commercial enterprise. In those days he threatened to kick me off the internet because I was trying to sell a white pages application on the internet created by a friend of Mark Andresen’s. Please be sparing with your idealistic dogma.

    Cheers, all. I hope you had a happy Fourth of July and got in a lot of playing time.

  • http://www.sonic.net/ Dane Jasper

    Ralph,

    If it were possible to provide ESPN3 to only customers who want to pay for it, I would be very supportive of that. My objection is not that I don’t want to collect and remit to ESPN, if they allowed this. My problem is that the model is all or nothing; all users get access, thus all users must pay. In my opinion, that is unreasonable.

    Note that the technology does allow for per user controls, we do this for example for dialup acceleration, and for nationwide dialup ports, both of which we pay for per user. But ESPN does not offer this, for them it’s ISP wide, not per-user, because that is their business model.

    -Dane

  • Jose

    Just want to say I completely agree with Dane. I would start to look at new providers if Sonic.net started down this path.

    I don’t need another tax, which is what ESPN3 would essentially be. I don’t want to be subsidizing other people’s ESPN3 channel when I don’t think I will ever use it. I might one day watch a particular sports event, but I would rather pay for that one event on my own dime.

    The way I see it is that ESPN is trying to get money from as many people as they can and they think they have the clout to strong-arm others into paying for it. I’m reminding of old-time shows where you see a couple of punks telling a shop owner that he has to “pay for insurance or something might break”.

  • Jeff

    I’d like ESPN3 via my ISP…which is Sonic.net. Would I switch solely because Sonic doesn’t provide ESPN3? Perhaps. It’s not a deal killer. And yes, other smaller ISPs provide ESPN3. Why not Sonic.net? Is the cost that high to bring ESPN3 to your sonic.net user base?!

  • http://www.sonic.net/ Dane Jasper

    Jeff,

    We’d love to provide it for the customers who would like to pay for it, but the model they are executing is that every customer must pay for it. It’s all or nothing.

    -Dane

  • Y-H

    Just wanted to voice my support for this decision.

    I just switched to sonic.net from AT&T a couple weeks ago, and I’ll be honest: I want ESPN3. Badly. But, I don’t agree with ESPN3′s business model, and I’m proud to be with an ISP that is willing to take a stance on this. Keep up the great work!

  • Scott

    I don’t like the ESPN3 pricing model, also.

    Furthermore, their customer support people are weasels: they wouldn’t answer repeated, direct questions about how whether or not their service costs money to participating ISPs!

    But, how am I supposed to watch football games which, until a couple years ago, were available in splendid over-the-air broadcast high-definition (I live in the South Bay where I can easily receive these stations)?

    ESPN has taken some ill-gotten gains from their relationship with the content bundlers and bought exclusive rights to the most popular sports programs.

    ** How do we fight this ??

    Dane erroneously thinks that passively not participating will help. I do not think so. He should actively solicit input from Sonic.net customers, and bundle their responses and forward to the appropriate authorities at ESPN3, the National Football League, BCS (college football), any other sports associations which ESPN plans to sequester, and US Congress.

    Currently, Comcast wants to buy the NBC network… this is a continuing effort by service bundlers to lock-up content and force customers to pay more than they want just to receive the few shows which they desire.

  • Jpbeale

    I’m a happy sonic.net user. I’m not a sports fan so I appreciate not being forced to pay an ESPN tax or any other content-for-someone-else tax. If there’s a way for me to help maintain that situation, let me know.

  • Runbei

    Hm, I’ve viewed major international track meets on the pay-per-view model, and, well, what’s wrong with that? ESPN3 would seem to lose by not offering that option which would allow it to scoop up a few Internet dollars from those of us who have no use for TV.

  • Arndog

    Like Y-H, I too recently switched from AT&T to Sonic and lost ESPN3.  I too want ESPN3 for the 2 or 3 games per month I would watch.  Like many posters I’m out running around a lot and don’t have cable TV because I don’t have the time to watch it, but I do want to watch the occasional game via the Interwebs.

    If Sonic finds a way to offer ESPN3 as a pay-per-view or a monthly add-on, I would be seriously interested.  I understand that ESPN offers it to ISPs as an all-or-nothing, but could Sonic control individual access on top of ESPN’s filtering?

  • Anonymous

    Unfortunately it is an all or none decision. We’re seeing more and more demand for ESPN3, and I’m considering making it a democratic decision by holding a vote. The majority would rule – and the result would be a fee for every customer, likely around $0.20/mo.

    Mulling that over.

    -Dane

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