Dish Network Corp. (NASDAQ: DISH) and Walt Disney Co. (NYSE: DIS) reached a long-term deal Monday that allows the second-largest U.S. satellite TV provider to carry Disney-owned networks such as ABC and ESPN. The deal also allows it to deliver that content outside of a traditional TV subscription, streaming via set-top boxes, smartphones, tablets and computers.
This marks the first time a content owner has granted cable or satellite TV operators the digital rights to sell their shows outside of a pay-TV subscription. Dish did not offer any details about what its potential TV subscription over the Internet might look like or cost, or when such a service would launch. There likely will be plenty of demand for it. North American consumers are expected to spend $6 billion this year on entertainment from services such as Netflix Inc. (NASDAQ: NFLX). That would be more than double what they spent in 2010.
The deal also will end pending litigation between the Dish and Disney concerning the former’s AutoHop feature, which allows viewers to automatically skip commercials on programming recorded on its DVRs. AutoHop will be discontinued for ABC programming for three days following the initial broadcast as part of the new deal.
The previous arrangement between Dish and Disney expired at the end of September, but they have been negotiating since then, hoping to avoid a signal blackout like the one between CBS Corp. (NYSE: CBS) and Time Warner Cable Inc. (NYSE: TWC) in August that resulted in substantial subscriber defections.
In order to offer a Netflix-like TV service to people who would rather stream TV over the Internet than place a satellite receiver on their roof, Dish may now seek to reach similar agreements with other big content owners, including CBS, 21st Century Fox Inc. (NASDAQ: FOXA) and Comcast Corp. (NASDAQ: CMCSA), which owns NBC.
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