The Dish Network Corp and Walt Disney Co have reached a landmark deal that envisions a day when the satellite service provider will offer a Netflix Inc-like service to people who would rather stream TV shows over the Internet than put a satellite receiver on their roof.
The deal announced late on Monday paves the way for Dish to offer live local broadcasts from ABC TV stations and programming from ABC Family, the Disney Channel, ESPN and ESPN2 over mobile devices, set-top boxes and other means, similar to how Netflix’s video streams are delivered.
No start date for the planned service was announced and it is likely that Dish will have to cut similar deals with other programmers to make the service attractive. A Dish spokesman refused to speculate on what the offering would cost.
As part of the new rights deal, Dish agreed to disable a function on its Hopper digital video recorders that allows customers to automatically record and strip out commercials from prime-time weeknight programming, for three days after the initial broadcast, but only for programs on ABC, which is owned by Disney.
Dish CEO Joseph Clayton said in a statement that the deal was “about predicting the future of television.”
Disney Media Networks co-chairperson Anne Sweeney said in a statement that Disney CEO Bob Iger and Dish’s majority shareholder, Charlie Ergen, were directly involved in carving out “one of the most complex and comprehensive” deals ever.
“We planned for the evolution of our industry,” she said.
With the pact, both sides are dropping a legal battle between them over the so-called AutoHop function that had threatened to cut into the revenue of media companies like Disney by stripping out ads.
Dish has not made public how many of its 14 million subscribers use the Hopper option. The companies said they would work together on new advertising models.
Dish last month announced a technology partnership with rival DirecTV to launch a system that helps target political ads to viewers based on where they live.
Dish and Disney said they are looking at dynamically inserting ads into programs based on viewer data, developing new ways of advertising on mobile devices and measuring viewing for longer than the current industry standard that includes the live broadcast, plus three days of DVR viewing.