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The Walt Disney Company and DISH Network Sign Groundbreaking Long-term, Wide-ranging Agreement
- New Multi-Year Deal to Deliver Best in Sports, News and Entertainment to DISH Customers, In and Out of the Home
- DISH First to Secure Rights to Carry Disney, ABC and ESPN Networks for Over-the-Top, Personal Subscription Service
- Landmark Deal Adds Disney Junior, Fusion, Longhorn Network, ESPN3, To-Be-Launched SEC ESPN Network and the Full Suite of Authenticated WATCH Services
- Expanded Video-On-Demand Content Available to DISH Customers at Home, On-The-Go
- Dismissal of All Legal Proceedings Between the Two Companies
Englewood, Colo. and Burbank, Calif., March 03, 2014 — The Walt Disney Company (NYSE:DIS) and DISH Network Corporation (NASDAQ:DISH) today announced a groundbreaking, long-term, wide-ranging distribution agreement that will provide DISH customers with access to Disney’s robust lineup of top quality sports, news and entertainment content across televisions, computers, smartphones, tablets, gaming consoles and connected devices.
The renewal agreement supports the companies’ mutual goal to deliver the best video content to customers across multiple platforms by strengthening the value of the multichannel video subscription today and by creating the opportunity for DISH to deliver new services in the future.
A KEY PART OF DISNEY'S LEVERAGE IS THE RENEWAL OF ESPN, THE MOST VALUABLE CHANNEL IN MULTICHANNEL TELEVISION.
The extensive and expanded distribution agreement grants DISH rights to stream cleared linear and video-on-demand content from the ABC-owned broadcast stations, ABC Family, Disney Channel, ESPN and ESPN2, as part of an Internet delivered, IP-based multichannel offering.
THIS APPEARS TO BE THE REALLY NEW STUFF. FROM THE SOUND OF THIS SENTENCE, DISH COULD OFFER THESE CHANNELS AS PART OF AN OVER-THE-TOP OFFERING. DISH MAY NOT BE OFFERING THESE CHANNELS ON SUCH A BASIS FOR A WHILE; DISNEY MAY HAVE INSISTED ON SOME "CRITICAL MASS" OF OTHER TOP SERVICES BE INCLUDED IN ANY PACKAGE WHICH INCLUDES THE DISNEY SERVICES. STILL, HAVING ESPN IN THE FOLD MAKES GETTING DEALS DONE FOR OTHER SERVICES MUCH EASIER FOR DISH. THIS IS A MAJOR GET FOR DISH. MORE ON THIS FROM PETER KAFKA AT RE/CODE.
Additionally, for the first time, DISH customers will be able to access Disney’s authenticated live and video-on-demand products, including WatchESPN, WATCH Disney, WATCH ABC Family and WATCH ABC using Internet devices in the home and on the go.
THIS IS STANDARD STUFF -- "TV EVERYWHERE" TO SUBSCRIBERS WHO HAVE AN EXISTING DISH SUBSCRIPTION OF VALUE TO BOTH PARTIES, BUT PROBABLY SLIGHTLY MORE VALUABLE TO DISH.
The agreement will result in dismissal of all pending litigation between the two companies, including disputes over PrimeTime Anytime and AutoHop. As part of the accord, DISH will disable AutoHop functionality for ABC content within the C3 ratings window. The deal also provides a structure for other advertising models as the market evolves, including dynamic ad insertion, advertising on mobile devices and extended advertising measurement periods.
THIS IS A BIG DEAL. THE COURTS WERE UNLIKELY TO HELP DISNEY GET RID OF THE AUTOHOP AD-SKIPPING FEATURE, BUT DISNEY WAS ABLE TO NEGOTIATE AWAY AT LEAST A SIGNIFICANT CHUNK OF ITS FUNCTIONALITY. THIS IS A BIG GET FOR DISNEY. LOOKING AT IT MORE BROADLY, DISH CHAIRMAN CHARLIE ERGEN LAUNCHED A FEATURE THAT HE KNEW WOULD UPSET PROGRAMMERS, THEN HE TRADED AWAY PART OF IT TO GET A DEAL DONE. SAVVY GUY. MORE ON THIS FROM JANKO ROETTGERS AT GIGAOM.
“The creation of this agreement has really been about predicting the future of television with a visionary and forward-leaning partner,” said Joseph P. Clayton, DISH chief executive officer and president. “Not only will the exceptional Disney, ABC, ESPN entertainment portfolio continue to delight our customers today, but we have a model from which to deliver exciting new services tomorrow.”
Anne Sweeney, Co-Chairman, Disney Media Networks, and President, Disney/ABC Television Group, said, “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. After months of hard work and out-of-the box thinking on both sides, led by Bob Iger and Charlie Ergen, 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.”
Added John Skipper, President, ESPN & Co-Chairman, Disney Media Networks: “We worked with DISH to smartly address the future of the multi-screen world on several levels. Together, we are adding value to the traditional video subscription by making great content accessible across platforms and delivering new products, including our WatchESPN authenticated networks, the highly anticipated launch of the SEC ESPN Network, expanded distribution for Longhorn Network, and a reimagined ESPN Classic video-on-demand channel. At the same time, we are creating opportunities to add new subscribers and introducing the value of a multichannel subscription to a small subset of broadband-only consumers.”
“This agreement allows us to bring more innovation to the customer experience, including new marketing, packaging and delivery options,” said Dave Shull, DISH Executive Vice President and Chief Commercial Officer. “This paves the way for more customer choice and control over the viewing experience.”
DISH will make available Disney Junior, Fusion, ESPN Goal Line, ESPN Buzzer Beater, as well as Longhorn Network and the upcoming SEC ESPN Network upon its launch. In addition, DISH, ESPN and ESPN Deportes customers will have access to the live and video-on-demand channel ESPN3.
THESE ARE ALL BENEFITS FOR DISNEY AND THINGS IT IS FAIR TO SAY THAT DISH CONCEDED, PARTICULARLY EXPANDED CARRIAGE OF THE CHANNELS DISH WASN'T ALREADY CARRYING OR CARRYING IN HIGHLY PENETRATED PACKAGES: FUSION, SEC ESPN, LONGHORN NETWORK AND DISNEY JUNIOR LAUNCHES ARE ALL SIGNIFICANT GETS FOR DISNEY. IF THE SERVICES ARE LAUNCHED IN DISH'S MORE HIGHLY PENETRATED PACKAGES (E.G., AMERICA'S TOP 120 AND AMERICA'S TOP 200), THESE LAUNCHES ARE VERY VALUABLE FOR DISNEY AND PROBABLY REPRESENT DISH'S MOST VALUABLE ECONOMIC CONCESSION.
As part of the agreement, DISH will launch ESPNEWS, ESPNU, Disney Channel and ABC Family in high definition. ESPN Classic will be reintroduced as a video-on-demand channel.
IN OTHER WORDS, ESPN CLASSIC HAS BEEN TAKEN OFF THE LINEAR LINEUP. ESPN HAS "DEALT OFF" CLASSIC TO GET MORE DISTRIBUTION FOR ESPNU AND OTHER SERVICE FOR NEARLY A DECADE NOW. THE LACK OF CARRIAGE OF THE HD FEEDS OF DISNEY CHANNEL, ABC FAMILY, ESPNU AND ESPNEWS WAS PROBABLY HURTING DISH MORE THAN THEY WERE HURTING DISNEY.
The extensive and expanded rights package gives DISH customer access to video-on-demand content at home, on computers and on-the-go through the DISH Anywhere app for tablets and smartphones, including:
- ABC On Demand, a fast forward-disabled service that features a selection of top-rated primetime entertainment programming, including episodes of such popular current ABC shows as “Scandal,” Castle,” “Grey’s Anatomy,” “Once Upon A Time” and “Revenge.”
- ABC Family On Demand, which features a variety of top-rated full episodes, refreshed monthly, from such popular millennial favorites as “The Fosters,” ”Switched at Birth,” “Baby Daddy” and “Melissa & Joey.”
- Disney-branded On Demand offerings, including Disney Channel On Demand, Disney Junior On Demand, and Disney XD On Demand. Refreshed each month, the Disney Channel On Demand offering will include episodes from such series as “Mickey Mouse Clubhouse,” “Sofia the First” and “Jake and the Never Land Pirates” for preschoolers, as well as variety of episodes from “A.N.T. Farm,” “Liv and Maddie,” “Jessie” and other popular series for older kids. Select episodes featured on Disney Channel On Demand will be available in innovative new offerings, such as playlists and monthly programming blocks, in addition to a number of episodes available in multiple languages. A variety of Disney Channel Original Movies will also be available. Disney XD On Demand features a selection of episodes from such series as the Emmy Award-winning animated hit “Phineas and Ferb,” “Pair of Kings” and “Kickin’ It.”
- Expanded On Demand content from ESPN, including content from ESPN Deportes and ESPN’s award-winning original content from ESPN Films.
THIS IS ALSO STANDARD STUFF THAT DISNEY HAS DONE WITH OTHER DISTRIBUTORS. IT IS OF VALUE TO DISH, BUT NOT OF EXTRAORDINARY VALUE.
The companies also renewed carriage agreement for ABC’s eight owned local stations, including WABC-TV in New York City, KABC-TV in Los Angeles, WLS-TV in Chicago, WPVI-TV in Philadelphia, KGO-TV in San Francisco, WTVD-TV in Raleigh-Durham, KTRK-TV in Houston, and KFSN in Fresno.
THIS WAS A BIG SOURCE OF DISNEY'S LEVERAGE. RETRANSMISSION OF ITS STATION GROUP IS THE ONLY WAY TO GET ABC FOR DISH CUSTOMERS IN APPROXIMATELY 20% OF THE US. THIS WAS A LARGE SOURCE OF DISNEY'S LEVERAGE.
DISH Network Corporation (NASDAQ: DISH), through its subsidiary DISH Network L.L.C., provides approximately 14.057 million satellite TV customers, as of Dec. 31, 2013, with the highest quality programming and technology with the most choices at the best value. Subscribers enjoy a high definition line-up with more than 200 national HD channels, the most international channels, and award-winning HD and DVR technology. DISH Network Corporation is a Fortune 200 company.Visit www.dish.com.
About The Walt Disney Company
The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international entertainment and media enterprise with five business segments: media networks, parks and resorts, studio entertainment, consumer products and interactive. Disney is a Dow 30 company and had annual revenues of $45 billion in its Fiscal Year 2013.
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