"Groundbreaking Long-term, Wide-ranging" Deal Between Disney, Dish Network

By Gary Kim March 04, 2014

The Walt Disney Company and Dish Network Corp. announced a programming contract they said was “groundbreaking, long-term, and wide-ranging.”

The deal provides Dish Network customers with access to Disney content across televisions, computers, smartphones, tablets, gaming consoles, and connected devices, on an over the top basis.

The deal is the first by a major network enabling widespread streaming access, and includes on-demand content from ABC-owned broadcast stations, ABC Family, Disney Channel, ESPN, ESPN2, Watch ESPN, Watch Disney, Watch ABC Family, and Watch ABC services.

The deal also ends all pending litigation between the two companies, including disputes over the Dish “AutoHop” ad-skipping feature.

As part of the programming contract, Dish will disable AutoHop functionality for ABC content within the three-day ratings window. In return, Dish agreed to carry Disney Junior, Fusion, ESPN Goal Line, ESPN Buzzer Beater, as well as Longhorn Network and the upcoming SEC ESPN Network upon its launch.

Dish also will launch ESPNEWS, ESPNU, Disney Channel and ABC Family in high definition, while ESPN Classic will be reintroduced as a video-on-demand channel.

The big question is what other major networks might do. As always is the case, the parties trade value: Dish giving up ad skipping and adding more Disney channels, while Disney grants, for the first time, widespread streaming rights.

Disney generally is considered the major network most supportive of on-demand and streaming access, so the fact that Disney moved first is not a surprise. The other networks have varying levels of comfort with streaming, but might now have to respond, at some point.

It will not be an easy decision for most of the major networks. But Dish has some cards to play. Few of the broadcast networks will want to cede ABC an advantage in ad viewership.

That will happen, in prime time, if ABC remains the sole broadcast network whose ads are not automatically skipped when prime time broadcast content is automatically stored by the Hopper box.

Dish, in turn, is just one of the major linear video content distributors, and the other major distributors do not have the "stick" of ad skipping to bargain away as a chip. Nor is it clear whether, or how much, Dish might be paying ABC for streaming rights.

Video distributors have argued that their current contracts should include streaming rights, while content providers logically resist, and insist streaming rights must be negotiated separately.

On the other hand, the established model is that video distributors agree to add new channels to their lineups in return for carriage rights to the "must have" channels offered by a network.

To be sure, the Dish deal with Disney does not address the issue of access to Disney content without the purchase of a linear video subscription. 

Still, the deal is a landmark, one more step in the direction of streaming delivery. 

Edited by Cassandra Tucker

Contributing Editor

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