Disney to Allow Satellite Giants to Offer Its Content Online
Earlier this week, satellite TV provider Dish Network (NASDAQ:DISH) announced a partnership with Walt Disney Co. (NYSE:DIS) that will allow Dish to create an Internet-based streaming service that Dish customers can use to access Disney-owned programming on their tablets, computers, smartphones, televisions, gaming consoles, and other devices. The agreement also ends all litigation between the companies over Dish’s controversial Auto Hop DVR service, which allows customers to skip over commercials. Now a spokesman for Dish’s biggest satellite competitor, DirecTV (NASDAQ:DTV), has told Reuters that it, too, is in the process of inking a similar contract with Disney.
“The deal and terms are not unexpected, as the Dish contract was the most recent in the Disney timeline to expire,” DirecTV spokesman Darris Gringeri said to Reuters on Wednesday. “The DirecTV contract is up next and we’re in the process of working with Disney on a similar long-term agreement of our own.”
Both companies have contracts with Disney that are set to end in December, which these streaming deals will replace. The streaming agreement with Dish represents the first time a content provider has allowed a pay-TV operator to offer content for streaming online. Disney’s content includes not just the various Disney channels but also the popular ESPN sports networks and ABC’s channels, as well.
The deals allow all three companies to take advantage of the growing trend in online TV streaming, which has proved to be incredibly popular among consumers through services like Netflix (NASDAQ:NFLX).
“The creation of this agreement has really been about predicting the future of television with a visionary and forward-leaning partner,” Dish CEO Joseph Clayton said in the company’s announcement.
Disney leadership echoed similar sentiments, saying that the agreement represents the wave of the future. “We knew early on we had a responsibility with this deal to not only do what was best for our business, but to also position our industry for future growth,” Disney executive Anne Sweeney said. ”This agreement, one of the most complex and comprehensive we’ve ever undertaken, achieves just that. Not only were innovative business solutions reached on complicated current issues, we also planned for the evolution of our industry.”
This news comes after an announcement last week that Disney made an expanded partnership with Apple (NASDAQ:AAPL) on a service called Disney Movies Anywhere that will allow the users of Apple devices to purchase, store, and stream Disney, Pixar, and Marvel films via the iTunes Store. Redeemable digital download codes that have been included in many Disney DVD and Blu-ray packages since 2008 can be used to add previously purchased films to a user’s Disney Movies Anywhere library.
These moves show that Disney is dedicated to getting into the new wave of digital media content delivery. The rise of services like Netflix and Hulu have spurred a growing movement of cord-cutters, or people who choose to ditch expensive pay-TV services for much cheaper online streaming. Disney wants to make sure consumers can still gain access to its popular programming — and that it can still be paid for that programming — as the traditional pay-TV model becomes increasingly challenged by online streaming.
More From Wall St. Cheat Sheet:
- Apple Gives Disney a Juicy New Bite
- Not So Magical: Disney’s Ticket Prices Are Increasing
- Dish and Disney Sign a Deal, Kiss Auto Hop Goodbye
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