ABC Unveils Fast-Forward-Disabled VOD Model

BURBANK, February 25: Disney-ABC
Television Group today announced an arrangement between ABC and its affiliates
that allows local stations to generate ad revenues through a
fast-forwarding-disabled VOD service that will be offered to cable, satellite
and telco platforms.

Under the new agreement,
ABC will provide network programs through a local advertising-supported
video-on-demand service in both owned and non-owned station markets to cable,
satellite, telco and landline operators who agree to disable the
“fast-forwarding” capability. The number of commercials in the VOD episodes is
still being determined, but will be less than the number featured during a live
broadcast. Each broadcast affiliate will have the opportunity to insert one
locally sold, 30-second commercial spot within each half-hour of programming in
those markets where ABC VOD is available. As part of this new arrangement, ABC
will have expanded opportunities to repurpose network programming at any time
though this VOD arrangement as well as through download services, including
iTunes and Xbox, with whom ABC has current distribution deals.

“We remain focused on our
consumers and finding innovative ways to make our content more widely available
to them; and we believe that this can be achieved by continuing to evolve the
ways we work with our distribution and advertising partners,” said Anne Sweeney, the co-chair of Disney Media Networks and president of Disney-ABC
Television Group. “This new arrangement provides further proof of the
dedication the network and our affiliates have to working together in unique
and inventive ways to create new opportunities that build all of our
businesses.”

Ben Pyne, the president of
global distribution of Disney Media Networks, added: “This new agreement is a
win-win for everyone. Our broadcast affiliates gain incremental revenue and
promotional opportunities; our cable, satellite and telco partners will now
have the opportunity to grow their on-demand offerings; our advertisers have an
additional platform to add to their mix; and most importantly, the desire of
consumers to have additional access to our programming is fulfilled.”

For the past several
months, ABC and Cox Communications have been participating in a free VOD trial
in California that involves disabling the fast-forward option for all offered
ABC content. Research indicates that 93 percent of users find the advertising
acceptable in exchange for gaining free access to their favorite shows. “Cox
customers in Orange County roared their approval of the free ad-supported ABC
content made available in the My Primetime category of our On DEMAND service,”
said Pat Esser, the president of Cox Communications. “Customer behavior and
response to our follow-up survey questions indicated that they really liked
having access to these popular shows via On DEMAND, that they wanted more
content and that they did not mind being exposed to advertising. We are very
pleased to be a part of this innovative approach to enhancing consumer value
while protecting stakeholder interests in the ad-supported TV model; we look
forward to expanding My Primetime with ABC and other broadcast networks.”

—By Mansha Daswani