Disney TV shows to be free on Web
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Disney TV shows to be free on Web

US media companies have been experimenting with ways to deliver programs through new technologies while maintaining revenue.

india Updated: Apr 11, 2006 11:19 IST

Walt Disney Co's ABC television network will offer some of its most popular shows, such as "Desperate Housewives" and "Lost," in a free service for consumers supported by advertising, the company said on Monday.

US media companies have been experimenting with ways to deliver programs through new technologies while maintaining revenue as viewership for prime-time television schedules slowly erodes.

But ABC's venture, which starts as a two-month trial in May, goes a step further, potentially bypassing cable operators by bringing top shows straight to the consumer, analysts said.

"Going direct over a broadband (Internet) connection is a very smart business and I think you'll see other broadcasters follow suit," said Rich Greenfield, analyst at Pali Research.

"This just continues to bolster our view that you should be investing in content and programming over pure distribution" like cable operators, he said.

ABC already sells digital downloads of its highest-rated TV shows for the popular iPod music and video player. Other networks have also tested digital and video-on-demand formats for airing shows soon after they first appear on broadcast TV.

Rival CBS Corp last month carried streaming video of the "March Madness" NCAA college basketball playoff games on a subscription-free, ad-supported basis, with much success.

"It's really an opportunity for us to learn about a different model," Anne Sweeney, president of the Disney-ABC television group, said at an annual cable industry convention in Atlanta on Monday. "It's more importantly recognizing that none of us can live in a world of just one business model."

Local stations, cable under pressure

Top ABC shows such as "Commander in Chief" and "Alias," along with "Lost" and "Desperate Housewives," will be available on the Web at ABC.com in May and June, starting the day after they are first broadcast, the network said. It will only be available to users with a U.S. Internet address to protect foreign broadcasting rights.

Viewers will be able to pause and move between "chapters" in an episode, but not skip ads that are technically embedded.

Advertising revenue will support the trial run on ABC.com, with 10 advertisers, including AT&T Inc, Ford Motor Co, Procter & Gamble Co and Universal Pictures already signed up. Some will insert video ads into the content, while others will sponsor shows, with the idea of tailoring commercials to the Internet experience.

Analysts expect more viewers would tune in to Internet versions of such shows rather than pay additional fees to download the programs to their iPods or view on-demand.

"The ones most threatened are local (television) stations and then the cable operators," said Brad Adgate, senior vice president of research at media buyer Horizon Media. "How much opportunity is there for local retailers to advertise?"

ABC said it would also explore ways to bring its local broadcast affiliates into online offerings.

Executives at the cable convention, sponsored by the National Cable and Telecommunications Association, said they viewed ABC's trial as part of the entire industry's effort to capture new audiences amid fiercer competition with the Internet, video games and digital downloads.

"The idea is to find a way to make the pie bigger," said Brian Roberts, chief executive of Comcast Corp, the top US cable operator.

Disney is also launching a high-speed Internet channel for soap opera fans, called Soapnetic, on April 17 for subscribers to Verizon Communications Corp's Internet services.

Sweeney said the network was keen on bringing in more viewers under the age of 27. Some marketers have dubbed them the "millennial" generation, who are at ease with technology and often use several media outlets at the same time.

Disney shares rose 26 cents, or 1 per cent, to $27.79 on the New York Stock Exchange after trading as high as $28.

First Published: Apr 11, 2006 11:19 IST