ABC Casts Wide Net
Disney's (DIS) decision to put popular shows online for free will pressure cable companies to step up their video-on-demand offerings.
The ABC move is a milestone because while rivals like GE's (GE) NBC and CBS (CBS) have been toying with the Internet, this is the first time a network is trying to draw in advertisers by giving away its best products.
The online push is a way to let "broadcast advertisers into the space and let them explore," Disney-ABC Television Group President Anne Sweeney says. She says programmers must consider new ways to grab viewers. Disney is giving away "Desperate Housewives," "Alias," "Lost" and "Commander in Chief."
The move poses a new threat to the cable industry. "I don't think an 'end around' of the whole cable business is viable," Time Warner (TWX) Chairman Dick Parsons says. But digital video recorders and video-on-demand are becoming increasingly important tools to attract viewers, and investors will be keeping an eye on who breaks from the pack there.There are questions where at least one new service is concerned. Cablevision (CVC) recently announced that it would offer a new centralized DVR service. But as with Internet distribution of content, copyright issues are likely to persist. On the Cablevision initiative, Discovery Communications Chairman John Hendricks says he is "very concerned about a third party manipulating content." Adds Geraldine Laybourne of Oxygen Media, "we always expect to get paid."
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