FRANK ROSE

Web, WiMax, cell phones, and more: The sports powerhouse is about to be on every screen in your life.

Wired 13.09, September 2005

EVER SINCE THE DAYS of Joe Namath and Howard Cosell, Monday Night Football has been one of broadcasting's signature events. Next year, after 36 seasons on ABC, it moves to ESPN. Suddenly, it won't just be on TV anymore, and it won't just be on Monday nights either. Imagine pregame coverage starting Friday on the cable network and on ESPN.com with polls, on-demand preview videos, and a special Monday Night Football message board. On Sunday, as pro teams hit the field in stadiums across the country, scores and poll results are announced online and via cell phone. Monday, games like "pick the play" pop up online and on the phone, too. During the main event, fans who can't get to a TV set can get score updates by phone. And postgame coverage on Tuesday includes video recaps via broadband and phone; if you want to see that second-quarter touchdown or game-winning field goal, all you have to do is ask for it. In these ways, ESPN plans to turn the traditional three-hour Monday telecast into a five-day multiscreen event that will enable football fans to follow the action any time, any place, any way they like.

"We want to make Monday Night Football the first totally integrated, interactive sports-media experience," says Ed Davis, a 34-year-old ESPN exec who's looking into how to make that happen. In a windowless conference room in midtown Manhattan, Davis is presenting other execs with a five-step "integration process," the result of weeks of work with a team led by John Papanek, the editorial director of ESPN New Media. As the distinction between television and other media begins to blur, ESPN is scrambling to make sure its audience can find it anywhere: not just on the tube and in print, but on the Web, on mobile phones, even in videogames. Monday Night Football will be the first big test.

At stake is the future of the biggest cash cow in the entire $31 billion-a-year Walt Disney Company. One of the most widely distributed cable channels in the US, ESPN owns 6 other US sports channels and 30 more across the globe. Together they generated $4.7 billion in revenue last year, contributing more to Disney's bottom line than the theme parks, more than the movie studios, and far more than their sibling network, ABC. But the TV business is changing fast, and networks that aren't nimble will be left behind. Television is slowly going digital, and sooner or later, like phone calls, it will be transmitted in the form of data packets, using Internet protocol. With IPTV, everything can be delivered on demand, from last night's Fear Factor to a Friends episode from the late '90s. If everything is on demand, channels won't mean much; people will navigate by searching. Which means the value of any network, be it broadcast or cable, will depend more on the power of its brand than its place on the dial.

As television networks go, ESPN is less threatened than many. It's by far the most highly rated cable channel among men 18 to 34, giving it an edge with advertisers eager to reach the famously elusive demographic. Because it carries so many live events, viewers tend not to record them, Nielsen research shows - and even when they do, they're less likely to fast-forward through the ads than people watching other programs.

Still, the idea that you'll only watch television by plunking yourself in front of a 60-inch plasma screen is growing quaint. Home networks will put TV on your desktop; a proliferation of wireless technologies, from 3G to WiMax, will let you take it anywhere. And in a few years, when the cable companies finally dump their bandwidth-hogging analog channels and go all-digital, they'll be able to offer broadband at speeds that will put TV-quality video on the Net. Professional television will no doubt remain distinguishable from the rising tide of videoblogs, but the age of one-to-many broadcasting will be over for good.

ESPN's response: Bring it on. "We are not a television company," declares John Skipper, whose job as head of most non-television operations, including ESPN.com and ESPN the Magazine, is to lead the outfit into the post-network era. "We are a sports media company. We're gonna surround consumers with media. We're not gonna let them cut us off and move away from our brand."

Coming from a unit of Disney, an old media giant that's had trouble getting even old media right (after all, ABC is the network that turned down Survivor and CSI), this is a remarkably forward-thinking position. Even more remarkably, it didn't come out of a series of panicked meetings about the threat from new media; instead it evolved over a period of years, out of the realization that ESPN's job is to serve sports fans in any way possible. That vision is so attractive that Robert Iger, Disney's president and soon-to-be CEO, announced at a Wall Street conference last June that the ESPN strategy - "content that lives on all media platforms" - will be the model for the entire company.

Of course, no one really knows whether the new model will be a financial success. Here, too, Monday Night Football will be a test: Even though ABC has been losing money on the show, ESPN has agreed to pay a record $1.1 billion annually for eight years because Skipper, in his other role as head of ad sales for all of ESPN and for ABC Sports, is betting his multiplatform approach will pay off. "If we're surrounding consumers with media," he explains, "we're gonna give advertisers the opportunity to do the same thing. If you've got the History Channel, and I'm an advertiser, I want to know: Did they record the Benjamin Franklin show and skip through my ads?" He gives a little shrug. "Maybe they did and maybe not. So what else can you do for me? You got radio? You got Internet? You got telephone? What do you got?"

THREE YEARS AGO, on a visit to Walt Disney Imagineering at company headquarters in Burbank, California, John Skipper saw the prototype for a new kind of Web video. What if the top stories on ESPN.com came to life? "I thought, This is great! This means I'm going to come to the office the day after Vince Carter dunks the ball over Frédéric Weis" - a phenomenal play in the 2000 Olympic basketball competition, when the USA's Carter, at 6'6", somehow levitated above the French team's 7'2" Weis to score - "and say to my buddies, 'Take a look at this!' Yeah, I thought that was gonna work."

Alas, the Disney Imagineers knew what video ought to look like, but they didn't know how to get around the problems of streaming it over the Web - the endless buffering, the wayward packets, the herky-jerky results. So Skipper turned to an in-house tech team, the Walt Disney Internet Group, which figured it could push video to users' PCs in the middle of the night. That would minimize ESPN's bandwidth costs, and it would solve the jerkiness issue by storing the video on users' hard drives instead of streaming it from a faraway server.

They called the new service ESPN Motion. Introduced in February 2003, it plays short clips - three-minute game highlights, for example - in a window on your PC, along with 15-second spots from such advertisers as Lexus and Warner Bros. It's become the prototype for other Disney media players, like ABC Motion and Disney Motion. Even so, of the 16 million individuals who visit ESPN.com every month, only about 2 million have been using Motion - probably because you had to install a program from the ESPN Web site to make it work. "It's been a lesson to me," Skipper says. "Getting people to download software is difficult." His solution: a Flash version that requires no download.

A North Carolina native who's spent the past 26 years rising through the cutthroat world of big media, Skipper speaks with a southern drawl and a folksy manner that almost succeed in masking his relentlessly aggro manner. He's tall and lean, with close-cropped hair and piercing blue eyes. His tan linen suit meets the dress code at ABC's New York headquarters, where he works in a modestly appointed fourth-floor office. The strategy he's following, he points out, was first laid out in the early '90s by Steve Bornstein, ESPN's then-CEO.

Bornstein laughs: "I'd like to tell you I figured out then that it was going to be an on-demand world, but that's not true." Still, Bornstein, who now heads the NFL's cable channel, admits to having had an "epiphany" when he was named chief executive of ESPN 15 years ago. To grow the business further, he realized, he'd have to move it beyond the TV set. So he started a radio network - an ESPN you could get in your car. He recruited Skipper, then head of Disney Publishing, to help launch the magazine -"an ESPN you could take to the bathroom." After that, he put Skipper in charge of the Web site.

Launched in 1995, ESPN.com laid the groundwork for all that's followed. One of the first big-media outposts on the Web, it's long been the most visited sports site. Yet when Skipper took over, it had been separated from its parent and rolled into Go.com, Disney's abortive attempt at an Internet portal. From the moment Go was shut down in 2001, Skipper and his deputies have been working to build in new features, add depth, and tie the site ever tighter to ESPN itself. But his biggest ambition has been to bring it into the broadband era. "You looked at the nasty old HTML page," he says, "and you went, Nothing's gonna happen here. It can't be the future."

Now he's taking on wireless. ESPN started sending news alerts to pagers a decade ago; last spring it went 3G, making news and game clips available through V Cast, a high-speed service from Verizon Wireless. Early next year it plans to introduce, in partnership with Sprint, a 3G service that will work on ESPN-branded handsets. "It's targeted to the fanatics - those people who need to be connected all the time," says Manish Jha, who heads the mobile operation. "We want them to think, 'I've got a device that lets me take ESPN in my pocket.'" Jha's people have done a lot of research - focus groups, market testing - and they've learned, somewhat to their surprise, that video clips are a secondary draw. Fans mainly want news alerts, statistics, and the ability to control fantasy teams. But they do like being able to reach ESPN wherever they are.

Starting next year, they'll be able to get ESPN even while playing videogames. Electronic Arts is planning to integrate it into the top-selling John Madden line of football games. Not only will EA's new games for the next-gen Xbox and PlayStation feature ESPN's on-air announcers, they'll also take advantage of the new consoles' Internet connections to provide news updates from ESPN.com during gameplay. The good news for hardcore fans, says EA marketing vice president Don Transeth: "You won't have to disconnect from the real world of sports to play videogames."

Mobile, Motion, videogames, the Web site - all are ESPN by other means. All rely on Skipper's sales team, which sells 50 percent of the ESPN/ABC Sports ad inventory in multimedia packages. (TV plus Internet is the most popular.) And all rely on one another to drive traffic. "We relentlessly and without shame cross-promote," Skipper says. "We find it just as effective to drive people from one medium to another as to drive TV viewers from one part of the day to another. It wouldn't make sense to do it any other way."

Yet pulling all these efforts together, as Skipper hopes to do with Monday Night Football, would be impossible if not for another epiphany of Steve Bornstein's. A decade ago, as the Internet was taking off, Bornstein looked around at ESPN's headquarters, a state-of-the-art electronic broadcasting center stuck incongruously in the scrubby backwoods of southern New England. This is where the network was started in 1979, during the earliest days of cable, by an out-of-work sports publicist who was frustrated because he couldn't get local ball games on TV. He picked the place because land was cheap; now Bornstein realized he'd have to take the whole thing digital. "I wanted to turn Bristol, Connecticut, into a bunch of 0s and 1s," he says. "And that's exactly what they've done."

BRISTOL IS A SMALL TOWN with two unusual landmarks: a windowless, 28-story concrete tower that serves as a test lab for the Otis Elevator Company, and ESPN. Once just a trailer and a couple of port-o-johns in the woods, the network's headquarters now boasts a half-dozen blandly modern brick buildings and 30-odd enormous satellite dishes surrounded by chain-link fencing. There are dishes between the buildings, amid the parking lots, looming outside the studios - giant white structures that seem to have popped out of the soil like so many upturned mushrooms. They're aimed at any spot in the sky where there's a satellite beaming down sports, from American baseball to Zimbabwean cricket. Every day they pull in between 250 and 500 hours of video.

The newest building at ESPN is the Digital Center, a $100 million investment in hi-def and IP that opened in June 2004. Nearly twice the size of the old analog production facility next door, it boasts a 210-terabyte server farm and snaking lengths of color-coded fiber that zip data packets around the premises at 80 Gbytes per second. Billed as one of the world's largest hi-def production facilities, it's also designed to make ESPN's vast video throughput instantly accessible to editors from every medium - TV, Internet, mobile - to slice and dice as they see fit. That makes a great many things possible. One project, still in the concept stage, is a rights engine that can be queried about any piece of video to find out what media it can legally be used on. Another is video search.

As television becomes increasingly on-demand, search will become an essential navigation tool. Until now, the search function on ESPN.com returned video only if an employee had linked that video to the site and keyed in data (say, touchdown-Curtis Martin-NY Jets) by hand. The network has long employed screeners who log the standout plays in every game; now that everything's done digitally, it becomes possible to hook up a search function to their indexing data. ESPN.com will soon launch a new search service that will retrieve video from Motion, as well as TV listings from across all the network's cable channels. Eventually they're after a system that will search and deliver in any medium. Want to see last night's opening kickoff on your phone? Just send a text message with your request.

The search initiative aims to bring the vast video resources in Bristol to the fans. But one of the biggest goals at ESPN is to bring the fans closer to Bristol. Here, too, digital production opens up new possibilities. A key element of ESPN.com's pro football coverage, for example, is Primetime HQ, a live text feed from a half-dozen or so network commentators as they watch the Sunday afternoon ball games in a war room in Bristol. As it is now, you can read all this and pose questions via chat while the games are played out nationwide. Flip to another screen and you can follow the action in every game simultaneously with a real-time scoreboard. "But if you look ahead five years," says Papanek, the new media editorial director, "this is very, very rudimentary."

Skipper is the salesperson behind ESPN's transformation, but Papanek is the theoretician, the one who asks the crazy questions. What if, instead of reading a transcript on your PC, you could be in the war room, talking with the experts as you watch the games? What if, in other words, you could combine the interactivity of the Internet with the immersive quality of HDTV? "If you're a fan, sitting in the room with all those people, it's like dying and going to heaven," Papanek says. With enough bandwidth, that kind of virtual reality experience becomes plausible.

The ultimate goal at ESPN is to bring fans closer to one another. As Papanek says, "There's nothing more communal that human beings do, outside of worship - and sometimes it's hard to tell the two apart." Of course, fans have far more opportunity to communicate on ESPN.com than they do watching TV, thanks to the well-used message boards on the site's SportsNation page, but that's a poor substitute for the throngs at an actual game.

ESPN took a baby step toward bringing fans together this winter, when it rolled out a feature called Voice of the Fan. Rather than the anonymous username you get on a message board, Voice of the Fan lets you pick an avatar from among a couple dozen animated characters and customize its features, hair, and clothing. You can record your comments on a PC mike or by calling an 800 number, and your character reads them aloud on SportsNation. Papanek thought maybe 10,000 people would sign up by the time the Super Bowl aired; they got 175,000.

"To get from text chat and animated avatars to a point where you feel like you're there with other fans, or in the lair where the experts live - that's the next step," Papanek says. "I see a future where thousands of fans at a virtual tailgate party are talking to each other and watching the game together." Who knows - maybe you could even have a virtual Howard Cosell wandering around delivering his staccato play-by-play, just as he did back in the 20th century. Papanek grins. "If you could smell the hot dogs, that would be nice, too."

ROSE: Is ESPN primarily a television network?

SKIPPER: No. I think the companies that are going to end up in trouble are the ones that are only television companies. That does not mean that our most important businesses and largest portion of profits come from television. But we made fairly significant mindshift in the late ‘90s where we are not a television company, we are a sports media company. Our job is to serve the fan. If you can cut the set off and you’re done with them, that’s a problem. We’re making sure that doesn’t happen. Our idea is, we’re gonna surround consumers wherever they happen to be, because people are not gonna use only that one screen any more to get what they want.

What was the impetus for this shift?

Steve Bornstein—he was first person I heard articulate this.

But he ran Go.com, which put together all the online properties of Disney and divorced ESPNsportszone from ESPN.

I wouldn’t call it divorced. They did decide that it was more important to aggregate the Internet assets in one place, because this was gonna be a portal play. The idea was, okay, we have such compelling content—ESPN for sports, ABC for news, ABC for entertainment, Disney for kids—that we can force people to come through our portal. The problem is, you can’t—if I go in through Yahoo!, I can still get to ESPN.com. Go doesn’t offer me any advantage there. That was a mistake.

So it makes more sense to have the Internet properties be part of the business units they come from?

At ESPN, it is so integral to our relationship with the fan and the rest of our media that it absolutely needs to be part of our company. The more time somebody spends on ESPN.com, the more ESPN television they watch. We relentlessly and without shame cross promote. We use our Web site to drive users to our programming. It’s where we sell magazine subscriptions. It’s going to be the engine that drives our data and real-time scores for the phone. It wouldn’t make sense for us to do it any other way.

You and John Walsh took over ESPN.com in 2000. How did you know what to do?

I’m not sure we did. John and I were old media guys, and ironically we could see no reason not to approach it as real media. I think maybe it was the fact that neither of us was particularly swamped by this Internet frenzy. I tell people that I’d never been on the Internet before I got here. I say it for effect, but I’d barely been. I was not a nutzoid guy who thought this was gonna change the world, so since I didn’t have to change the world and make people behave differently, we could figure out how people had done things before and might do them on this different medium.

As televison becomes increasingly on-demand, you can’t really count on channels to be a destination any more. How does ESPN deal with that?

Our intention is to remain available to the broad American public. We believe that for the foreseeable future, the next ten to fifteen years, our television model is gonna be there. We don’t believe people will record and time shift live sports programming to any appreciable extent. The early Nielsen studies also suggest that even when people do timeshift sports, they watch more commercials than they do on other programming. So we think that live sports and breaking news will be least affected by the DVR. And we have a fairly consistent position with regard to what we say to consumers and advertisers. We’re gonna surround consumers with media—we’re not gonna let them cut us off and move away from our brand. Same thing with advertisers—if we’re surrounding consumers with media, we’re gonna give you the opportunity do the same thing. They like that, because what do they worry about? As consumers have more choices and more control, is my spot being watched? We can say with confidence, Not only is your spot being watched, but you can send the same message online, in the magazine, and over the radio. If you’ve got the History channel you can get some ratings, but when they cut that channel off they’re not there. If I’m an advertiser, did they record the Benjamin Franklin show and skip through my ads? I dunno, maybe they did and maybe not. What else can you do for me? You got radio, you got Internet, you got telephone—what do you got?

Sit back and get ready for packetized, on-demand, digital broadcasts.

Wired 12.12,
December 2004

We live in the age of the digital packet. Documents, images, music, phone calls - all get chopped up, propelled through networks, and reassembled at the other end according to Internet protocol. So why not TV?

That's the question cable giants like Comcast and Time Warner and Baby Bells like SBC and Verizon have been asking. The concept has profound implications for television and the Internet. TV over Internet protocol - IPTV - will transform television into an on-demand experience. For the Internet, it will mean broadband at speeds 10, 100, or even 1,000 times faster than today's DSL or cable. Online games would be startlingly realistic; the idea of channels would seem hopelessly archaic. Why not indeed?

So far, the answer has been inertia. But competition is a powerful stimulus. For years, DirecTV and EchoStar have been adding subscribers far faster than cable, so cable companies want something satellite can't match. At the same time, voice over IP is enabling cable operators to poach phone customers from telcos. Combine VoIP, truly high-speed broadband, and totally on-demand TV - and you've got such a compelling proposition that the Bell companies figure the only way to survive is to do likewise.

IPTV is not to be confused with television over the Internet. On the public Net, packets get delayed or lost entirely - that's why Web video is so jerky and lo-res. But private networks like Comcast's are engineered, obviously, for reliable video delivery - which means IPTV will look at least as good as TV coming from digital cable or satellite.

It will be accompanied by another, equally critical change. Instead of broadcasting every channel continuously, service providers plan to transmit them only to subscribers who request them. In effect, every channel will be streamed on demand. This will free up huge amounts of bandwidth for hi-def TV and high-speed broadband. Add IP and you get interactive services like caller ID on your TV. And the system will be able to track viewing habits as effectively as Amazon tracks its customers, so ads will be targeted with scary precision. Put it all together and you've got television that's as intensely personalized as 20th-century broadcasting was generic.

But that scenario is a good five years out. First there's a lot of upgrading to do. The Bells have the worst of it: Their copper lines max out on current-generation DSL, never mind TV. SBC is testing an advanced form of DSL that promises 7 times the bandwidth it delivers now. Verizon plans to spend billions to provide its 30 million customers with direct fiber connections offering nearly limitless bandwidth. Cable companies have already upgraded their networks, at a cost of some $85 billion, but it will be 2007 before they complete the transition from analog to digital and some time after that before all their customers get IP-addressable set-top boxes.

Meanwhile, work continues. CableLabs is working on IPTV as part of its Next Generation Network Architecture project, a semi-secret effort to optimize cable for all-digital delivery. Microsoft has developed an IPTV software platform that's being tested by SBC and Bell Canada, among others. It's also partnered with electronics maker Thomson to develop boxes, and with Intel and others to put IPTV on a chip.

But the cable industry seems as intent on keeping Redmond out of IPTV as it was on fighting the company's earlier efforts to get inside the set-top. That's no surprise. Cable networks pass 95 percent of US households and - once the conversion to digital is complete - could feed each of them more than 5 Gbits per second. That's like having 100 T3 lines. The Bells won't be able to match that without taking on a mountain of debt, and satellite operators can't do it no matter what they try. Which means that Comcast and its ilk could be as dominant in this century as the Bell system was in the last.