Deal lets Comcast customers watch Disney channels on the go

Entertainment giant Walt Disney Co. has struck a deal enabling Comcast Corp. cable customers access to all its popular channels — including ESPN, ABC, ABC Family and the Disney Channel — from portable devices and video-on-demand services.

The comprehensive 10-year agreement announced Wednesday underscores how entrenched media giants are lining up to protect the decades-old pay-TV business model. Several years ago, entertainment companies were divided on whether to offer some of their most valuable programming free on the Internet, through services such as Hulu, in hopes of attracting younger viewers and advertising dollars.

But TV executives have concluded that advertising alone will not support the high cost of producing television shows. Increasingly, media companies, including Time Warner Inc. and Rupert Murdoch’s News Corp., have been embracing the economics of the cable industry, which is driven by monthly subscriptions. And cable operators including Comcast, the nation’s largest, have been busy rolling out new digital services to keep up with technology — and keep their current customers happy.

“They’ve designed this in a way that’s pro consumer,” said Mike Vorhaus, president of consulting firm Magid Advisors. “Subscribers get extra content and on more platforms. People like the multi-platform availability they get through these authentication services.”

Wednesday’s pact will allow Comcast’s Xfinity customers to watch Disney’s channels live or on-demand at home or away on a number of screens, including a computer, tablet or smartphone. The deal marks the first time that programming from all of Disney’s channels, including its sports juggernaut ESPN, will be offered through an authenticated service provided by a cable TV operator.

Comcast customers must register to verify, or authenticate, that they are paying cable subscribers before gaining access to the programming on computers or other devices.

“This is a landmark deal. We get the broadest rights to all of the Disney channels across the most platforms of any distributor,” Neil Smit, chief executive of Comcast Cable, said in an interview. “It demonstrates the value of the multi-channel business model.”

In a previous agreement, Disney extended to Time Warner Cable the option for its customers to access “Watch ESPN,” the sports network’s authenticated streaming service, but not Disney’s entertainment channels.

The Disney-Comcast agreement marks the first time that Philadelphia-based Comcast has agreed to pay for retransmission of ABC-owned TV stations. For the last few years, broadcasters, including Fox, ABC and CBS, have been negotiating with cable companies to receive payments for signals that previously were carried free of charge.

Financial terms of the deal were not disclosed. Over the life of the contract, Disney could generate hundreds of millions of dollars in revenue.

Disney and Comcast said 70 services would be covered by the distribution agreement. Other networks include: Disney Junior (a new 24-hour basic-cable channel for preschoolers), Disney XD, ESPN2, ESPNU, ESPN Deportes, ESPNEWS and ESPN Classic. The deal includes retransmission consent for seven ABC-owned broadcast television stations, among them WABC-TV in New York, WLS-TV in Chicago and KGO-TV in San Francisco. In these markets, ABC’s local newscasts may eventually extend to new digital platforms such as Apple Inc.’s iPad.

Anne Sweeney, co-chair of Disney Media Networks, said in a statement that the deal was “a great example of what can be achieved when programmers and distributors collaborate and innovate together to meet the ever-evolving needs of consumers and enhance the viewing experience.”

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