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Disney offers next-day iTune downloads

Posted by iTech - 2005-10-13

ABC's unprecedented plan to offer next-day downloads of its biggest prime-time hits for $1.99 per episode via Apple's online iTunes store opens a new revenue stream for the TV industry and a new era of digital portability for viewers, experts said on Wednesday.
 
The move, unveiled in conjunction with a new partnership between the Walt Disney Co. and Apple Computer Inc marks the latest bid by a major broadcast network and its parent company to shake up "old media" models and expand their avenues of distribution.

"This is the first giant step in terms of making content available to more people in more places," Disney CEO Robert Iger said in announcing the deal.

Commercial-free episodes of two of U.S. television's highest-rated shows -- ABC's "Lost" and "Desperate Housewives" -- will be available for download from Apple's iTunes a day after their network broadcast. Last season's episodes will be available for download immediately.

Viewers will then be able to watch those shows at their leisure on the new video-playing iPods and newly upgraded iMac computers unveiled by Apple on Wednesday.

Apple's iTunes will also offer downloads of ABC's new drama "Night Stalker" and Disney Channel's two most popular cable TV shows, "That's So Raven" and "The Suite Life of Zack & Cody."

The downloads will be priced at $1.99 per episode, the same as iTunes will charge for music videos.

Iger said he sees the portability of the TV-viewing experience offered by iPod and similar devices "as the future as far as we are concerned."

But the move raised questions about whether instant access to current prime-time shows might diminish their future value in the burgeoning DVD market and in broadcast syndication.

David Miller, a media analyst for brokerage Sanders Morris Harris, said the added distribution outlet "increases the value of the content" and complements Disney's overall strategy.

"Disney has always taken the attitude that they want to be able to distribute their content to anyone, any time ... no matter how they want to consume it," he told Reuters.

Mike McGuire, research director for the Gartner Group, said the downloads present "another way to extract revenue" from Disney properties without cannibalizing commercial potential for DVD sales and reruns.

The availability of cheap downloads of single episodes could help drive demand for DVD boxed sets, giving more consumers a chance to sample a show before deciding whether they want to pay for an entire season. And he said audiences that seek out their entertainment on the Internet differ from the more "passive" viewers who settle for traditional reruns.

"This is about a very active, growing consumer base, active in the sense that they will do a little extra work to ... get content outside of a programing schedule, and oh, by the way, they want that content to be portable."

Offering downloads of shows stripped of ads, however, might give advertisers the jitters, he added.

The Disney-Apple venture comes as numerous networks are exploring new outlets for on-demand viewing of their shows.

Last month, the Viacom Inc.-owned UPN network began offering video streaming of its new hit comedy "Everybody Hates Chris" through Google Inc.

And the WB network, controlled by Time Warner Inc., has debuted two of its shows, "Jack & Bobby" last season and "Supernatural" this fall, through sister online service AOL before they premiered on television.



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