For years, the sports media business has been flirting with micropayments—smallish fees that allow fans to access content on a one-off basis. In 2018, the NBA experimented with letting fans purchase just the fourth quarter of games. (It didn’t really work.) Last year, Amazon introduced pay-per-view–style transactions for select soccer programming in the U.K., charging around $3.50 a match. More recently, of course, Disney sued Dish Network over Sling TV’s “Day Pass”—a one-day subscription that would allow viewers to, say, watch a full slate of Sunday NFL games for $5… or anything they want, really. But let’s be clear: These passes are targeted directly at sports fans. (In November, a court denied Disney’s request for a preliminary injunction, meaning Sling can continue offering the passes while the case proceeds.)

On the most basic level, this is a dispute between two companies over a valuable customer base—and the legal arguments are fairly predictable. In the eyes of the distributor, Dish pays for the right to carry ESPN and should be allowed to sell different packages at preferred price points. ESPN, on the other hand, doesn’t want to lose its most price-sensitive customers. Take last night’s Monday Night Football finale: If people can pay Sling $5 to watch C.J. Stroud’s Texans take on Aaron Rodgers’ Steelers in their AFC wild card matchup, does that limit ESPN’s potential subscriber gains?

But no matter how the lawsuit—and recently filed countersuit—shakes out, it raises a philosophical question for the industry: How do you engage diehard and casual fans in an era of unlimited choice? Moreover, are micropayments merely a gimmick—or a real solution for getting fickle customers to choose a TV experience over, say, watching highlights on TikTok? Naturally, the answers are complicated, nuanced, and not universally applicable.

It doesn’t take a marketing genius to understand why casual fans would rather watch sports clips on their phones, for free. It’s not just that the content is portable: Most streaming services have increased their monthly subscription fees by double-digit percentages over the past year or so.

Naturally, this presents a headache for the likes of ESPN chairman Jimmy Pitaro and his new head of platform distribution, Jimmy Zasowski, both of whom know that the future of their business depends on keeping younger viewers in the consumer journey pipeline. In 2022, Pitaro admitted that worrying about how to reach younger audiences kept him up at night. “As an industry in general, we need to figure out how to be more relevant to younger people,” he noted. Since then, and despite widely held assumptions about the strength of Disney’s streaming business, domestic subscriber numbers have barely budged. And while ESPN Unlimited might help increase subscribers, most analysts will tell you that the total addressable market of diehard fans willing to spend $30 a month on one of many platforms for live sports isn’t as large as Pitaro is hoping for.

In media executives’ fantasies, the streaming era was supposed to allow networks with built-in audiences, like ESPN, to directly reach their customer base. But an oversaturated entertainment landscape, and the rise of social media platforms as hubs for sports content, has complicated all that. Back in August, when Sling’s Day Pass was announced, the company’s S.V.P. of product and operations, Seth Van Sickel, said, “This launch is about putting control back in the hands of the fans… all without having to sign a long-term, binding contract.” But what Sling is really proving is that most fans can get their sports fix without unlimited access to games and seasons—which should be a terrifying sign for a streaming company reliant on those very subscriptions.

Thanks, Julia. See you all on Thursday,
John