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Disney, YouTube Announce Partnership

Jesse Ward — Mon, 07 Nov 2011 20:01:05 +0000

Google’s YouTube and the Walt Disney Co.’s Disney Interactive Division have agreed to a new partnership, according to a widely cited article in today’s New York Times. Under the terms of the deal, the media giants will spend a combined $10 million – $15 million on original video series. The “family-friendly” shorts will be produced by Disney and distributed on a co-branded channel on Disney.com and YouTube. The channel will also include amateur video culled from the torrent uploaded to YouTube daily.

The online video destinations are anticipated to launch in early 2012. The first show will be an original video series based on Disney’s alligator-themed mobile game “Where’s My Water?,” scheduled to launch in February 2012.

“With online video consumption exploding and YouTube at the center of that trend, we see an opportunity for Disney Interactive and YouTube to bring Disney’s legacy of storytelling to a new generation of families and Disney enthusiasts on the platforms they prefer,” Disney Interactive co-president Jimmy Pitaro said in a statement. “As we prepare to re-launch Disney.com in fall 2012, the Disney/YouTube destination will play a critical part in our next generation platform.”

Last month, YouTube announced plans to launch 96 channels featuring original content from a variety of entertainers during the course of the next year, part of the company’s attempt to attract more video advertising. Confirmed partners include Shaquille O’Neal, Madonna, Ashton Kutcher, Deepak Chopra, The Onion, Thomson Reuters and The Wall Street Journal.

Not For Sale: Hulu

Steve Fravel — Mon, 17 Oct 2011 15:51:23 +0000

The Walt Disney Co., News Corp. and Providence Equity Partners said in a prepared statement, “Since Hulu holds a unique and compelling strategic value to each of its owners, we have terminated the sale process and look forward to working together to continue mapping out its path to even greater success. Our focus now rests on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu.”

Recent stories and analysis of the “auction” for Hulu pointed out that given the low bids received, combined with the likelihood of Hulu growing into a more robust subscription service, it could suggest that keeping Hulu and Hulu Plus may be the better solution. Certainly once the million subscriber benchmark was crossed, it seemed that the better strategy would be for the current owners to maintain control of Hulu.

Dish Network, Google and Amazon provided bids for the service, with Google submitting the greatest dollar amount but tying its offer to several conditions. Dish Network appeared to have the inside track to gaining Hulu with the next highest bid. The owners and experts both seemed surprised at the low dollar amounts bid. Indications were that the winner might be getting the Hulu service and content for approximately $2 billion.

The owners are going to keep it and maintain control of the “next day” distribution of ABC, NBC and Fox programming. Had the sale gone forward, relinquishing control of the content might have been a crippling error.

Apple Considers Hulu

Steve Fravel — Fri, 22 Jul 2011 17:40:06 +0000

Although the company declined to publicly comment, Apple is said to be in discussions concerning a possible bid for online video site Hulu. Last week, the owners of Hulu — Walt Disney Co., News Corp., Comcast and NBC Universal — confirmed that the ownership of Hulu was definitely in play.

A possible Hulu acquisition would provide Apple with a new subscription service featuring more video. Currently Apple provides video for it’s popular iTunes customers on an on-demand rental basis rather than a subscription. Comcast, Disney and News Corp. have built a program rights extension of five years into the sale, creating a strong potential alternative to Netflix.

Estimates are that Hulu will command more than $2 billion.

For more, see this Bloomberg News article.

AMC Network in Play?

Steve Fravel — Fri, 08 Jul 2011 17:56:11 +0000

Spun off last week by Cablevision, the former Rainbow Media Holdings may be the acquisition target for one of several media companies. Rumor has it that Disney, News Corp. and Time-Warner each may have an interest in buying the newly renamed AMC Networks.

AMC Networks owns AMC, IFC, WE TV and the Sundance Channel. AMC also owns IFC Films and international programmer and TV program distribution unit. Speculation is that a deal for AMC Networks could run in the $3 billion range.

None of the organizations has commented publicly on the rumor. Of course if a deal is to go through it will provide the wining content provider with even more market power in retransmission consent negotiations.

Fox vs. Dish Network

Steve Fravel — Tue, 12 Oct 2010 19:58:22 +0000

The reported re-negotiation breakdown is now firmly headed for a resolution unknown.

Fox has demanded that Dish Network remove FX, National Geographic Channel and 19 Regional Sports channels from the line-up. Dish Network is displaying information banners on the channel guide where the channel information for those channels used to be.

Dish is claiming that Fox is asking for exorbitant fees for the sports networks.

The NBA and NHL, both of whom have teams that license games to Fox Regional channels, are siding with Fox. Fox, the NBA and NHL are directing subscribers to competitors. Competitors are doing their level best to draw subscribers to them. Fox is apparently making the Fox-owned stations part of the issue as re-negotiating retransmission consent is also running short on time.

In a press release, Dish Network claims that Fox is demanding a 50% increase over current fees for the Regional Sports channels. Dish indicates that in these trying times, that kind of money is too much to ask their subscribers to pay. This is bound to get very ugly, very soon, or maybe not. Dish Network had a dispute earlier this year with Disney and dropped four HD channels. They aren’t back in the line-up yet.

There are editorials around the country indicating a desire for a la carte over the current bundling requirements placed on distributors like Dish Network. Perhaps a la carte is an option. Perhaps the cost has begun to outweigh the value.

Disney Pays $763 Million for Social Games

Steve Fravel — Wed, 28 Jul 2010 15:27:02 +0000

According to observers, the social gaming business is booming. Disney’s initial payment of $563.2 million places the Walt Disney Co. squarely into social gaming as the largest Hollywood operator. The deal is reportedly structured to include additional payments of nearly $200 million should Playdom achieve significant undisclosed growth benchmarks.

The concept uses simple games that include ”virtual retail” opportunities for players to purchase everything from clothing and spa visits to refreshments for their game characters. Playdom is one of a group of game developers that are part of the rapid expansion of social game growth in network environments like Facebook.

Playdom will be developing social games based on Disney characters, providing an additional entertainment and interactive experiences for fans who are devoted to networks like Facebook.

According to reports, Disney officials look at the Playdom purchase as additional diversification in their extensive digital media portfolio. The investment places them well into casual social gaming while at the same time allowing for participation in the more complex gaming platforms like XBox, Wii and Playstation.

This is an interesting business where a revenue stream opens that involves “virtual goods and services.” Players are able to outfit characters with all manner of products. According to industry reports, virtual goods and services sold in social games may reach more than $800 million this year.

NY Times Profiles ‘Big TV Brawls’

Jesse Ward — Mon, 12 Jul 2010 19:52:18 +0000

The New York Times published an interesting article yesterday which highlights the escalating programming war between content providers and carriers – and the simultaneous conflict for subscriber eye balls between telcos and cable providers.

Over the weekend Verizon took aim at Time Warner Cable, noting that Time Warner’s contract with Disney – supplier of ESPN, ABC and the Disney Channel – will expire on September 2. Verizon ran two high-profile ads which urged customers to preemptively switch to Verizon’s FiOS service to retain programming.

“Count on ABC7 for the best programming. Count on FiOS for ABC7,” read a full-page ad in The Los Angeles Times on Saturday. A similar ad on Friday in The St. Petersburg Times of Florida tilted off ESPN: “You don’t have to wait to find out if you will keep your favorite shows. Switch to FiOS.”

It’s a gutsy move on Verizon’s part, especially since Time Warner’s programming contract with Disney does not expire for almost two months. Verizon’s public relations campaign speaks to the increasingly competitive nature of the video marketplace.

As you know first-hand, no video provider is immune; despite playing hardball in a few notorious cases, when push comes to shove the broadcasters have won (i.e. Disney over Cablevision, Fox over Time Warner.) Indeed, all types of TV distributors have lost substantial ground as broadcasters and cable content providers demand generous retransmission consent fees.

I expect we will see increasing animosity between telcos, cable cos. and content providers in the months to come.

For more, read this New York Times article: “In Cable Delivery, Rivals Pounce“

Dish Network Drops 4 HD Channels

Steve Fravel — Wed, 23 Jun 2010 14:42:03 +0000

In a dispute with Disney and ESPN, Dish Network had dropped Disney Channel HD, Disney XD HD, ABC Family HD and ESPNNews HD. According to a report filed in MultiChannel News, Dish Network claims that proposed carriage fees for the four channels are too high. Disney has countered with the assertion that Dish Network does not have “a deal in place” to support distribution of the four channels.

Dish Network noted in the article that the company recently began offering all its customers, “HD Free for Life.” Dish Network has indicated that they will continue to negotiate with the Walt Disney companies until an agreeable rate can be reached. Continuation of the HD Free for Life arrangement is dependant on low-cost carriage fees, according to Dish Network.

Disney points out in a statement, that a recent New York State Court ruling supports its position that Dish Network does not have legal rights to the four channels without paying the fees. The court ruling cited by Disney is a breach of contract suit filed by Dish Network in 2008 claiming that Disney and ESPN did not provide them with the high-definition feeds of ESPNNews HD, Disney DX HD, Disney Channel HD or ABC Family HD.

Dish’s action did not effect the SD versions of all four channels.

One has to wonder, if Dish Network truly had no deal in place, how is it that the receivers used to pull the signals down were authorized? This authorization had to have come from Disney and ESPN. Is this a warning sign for rural telcos? Does this mean that HD carriage fees are now subject to high rate increases?

Disney echoed Dish Network in regard to continuing negotiations for the HD channels. Considering the the loss of the Dish HD subscribers, this seems logical.

Cablevision and Disney Reach Tentative Agreement

Jesse Ward — Mon, 08 Mar 2010 22:35:46 +0000

Cablevision and the Walt Disney Co. engaged in a very public battle this past weekend over retransmission fees. The two media giants reached a tentative truce yesterday evening, just after the start of the Oscars.

Early Sunday morning, Disney pulled its ABC station from Cablevision, a hard-line tactic intended to force Cablevision to negotiate and settle the contract dispute or risk stranding its three million cable customers in New York, New Jersey and Connecticut without access to the Academy Awards.

The two companies finally found some common ground at 8:44 p.m. Eastern time, the same time that the signal for the local ABC station was restored to Cablevision’s customers. The companies did not disclose the terms of the deal, although people familiar with the matter said the terms were still quite tentative.

ABC started by asking for up to $1 per subscriber a month for the right to transmit its local signal, though people briefed on the matter say that was a negotiating maneuver and the target price is closer to 60 cents a subscriber.

In separate statements, both sides heralded the end of the stalemate. Cablevision said: “We are very grateful to our customers for their support and pleased to welcome ABC back.”

Disney said the deal “recognizes the fair value of ABC7.”

This is the latest public battle between media giants and cable companies in regards to contract negotiations. Disney is under pressure to stand its ground: if it doesn’t win concessions from Cablevision it could set a precedent for future retransmission payment negotiations.

The New York Times reports.

Disney to Charge for Online Content via Subscriptions

Jesse Ward — Mon, 27 Jul 2009 23:25:49 +0000

Disney plans to offer a broad array of its content, including movies, TV shows and games, online to those willing to pay for it — possibly at a single Web site that requires a subscription, president and CEO Robert Iger said Wednesday.

“The notion of going online at some point as a subscribe-to, robust entertainment experience is pretty attractive to us,” Iger said. “We are developing such an experience.”

Iger went on the record last week at Fortune magazine’s Brainstorm: Tech conference, but he declined to offer any additional details.

Disney is no stranger to the Web. Disney has partnered with NBC Universal and News Corp. as a content provider and equity partner in Hulu. Disney also sells content on iTunes and charges a subscription fee for its Club Penguin site.

The Hollywood Reporter has the story.