Dish Network has taken a small step toward delivering the first mainstream broadband-based subscription TV service in the U.S., closing a deal with Disney last week that gives the satcaster unprecedented over-the-top streaming rights to five cable networks.

But the road to a so-called "virtual MSO" is rough, to say the least.

Dish isn't providing details about what such an over-the-top TV service might look like, when it might launch, or how much it might cost consumers (although execs apparently told Bloomberg it's looking at $20-$30 per month). DirecTV is seeking a similar deal with Disney. But as attractive as such a venture may appear on paper, either company would face multiple hurdles in trying to bring it to fruition.

With the Disney deal, Dish has secured linear and VOD content from ABC-owned broadcast stations, ABC Family, Disney Channel, ESPN and ESPN2 as part of an Internet-delivered multichannel offering. That content could be part of a lower-cost service aimed at consumers fed up with regular cable or satellite TV.

But programmers like Disney are purposely trying to avoid arming over-the-top providers with rights to all of its channels, which would risk siphoning people from traditional services.

Any virtual MSO service is "almost certainly going to be lighter," said analyst Colin Dixon of research firm nScreen Media. "You force the consumer to decide, 'What channels do I watch, and will it be worth switching?' "

Furthermore, Dish's rights from Disney are limited to a single stream per Internet-connected device at once. Right off the bat, that will make the service unappealing to most American households, which on average have more than one TV (not to mention multiple video-capable devices). The intent of that limitation "is to make this service an 'on-ramp' to pay TV for cord-nevers, as opposed to an 'off-ramp' from the pay TV bundle for cord-cutters," Bernstein Research analyst Todd Juenger wrote in a research note.

Only 5 million homes have broadband and no pay TV subscription, according to Nielsen estimates. Given the small number of prospective customers for a live Internet television, Dish or anyone else would pay Disney more per subscriber than existing pay TV services for the same channels.

Yes, an Internet-delivered TV service has cheaper subscriber-acquisition costs: There would be no need for a service call to deliver equipment, and potentially no set-top box. However, there are bandwidth costs; Netflix has just agreed to pay to interconnect with Comcast to ensure it has enough capacity to reach subscribers over the cable operator's network.

Despite the headwinds, Dish is looking to carve out new areas of growth because its traditional TV business has flatlined, at around 14 million customers. The industry at large is leveling off, too.

Others see the pay TV biz as ripe for shakeup. But no one has made that leap.

Verizon in January acquired Intel's OnCue division for about $200 million, after the chipmaker decided that getting into the pay TV biz was too expensive. Meanwhile, Sony announced at the 2014 CES that it plans to test an Internet-delivered TV service sometime this year.

It's no secret Dish has been contemplating a lower-cost Internet TV service for years; founder Charlie Ergen has discussed the virtual MSO concept on several occasions. As he lamented via Dish's earnings call last month, "We're losing a whole generation of individuals who aren't going to buy into (the MSO) model because they only want one particular show or they want to watch the show wherever they can or they want to watch it on their schedule, and so that generation is not signing up to satellite or cable or phone video today."

2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC