Disney And Dish Ink First Of Its Kind Programming Deal; Dish To Disable AutoHop Feature

Mar 5 2014, 1:24pm CST | by

Disney And Dish Ink First Of Its Kind Programming Deal; Dish To Disable AutoHop Feature
Photo Credit: Forbes Auto

After months of negotiation, Disney and Dish Network, have reached a long-term programming deal, allowing the satellite TV operator to carry Disney’s networks such as ABC and ESPN. The deal will also grant Dish over-the-top rights to include Disney programming in a web based service.
/>

As part of the agreement, Disney will also drop its lawsuit against Dish over the AutoHop service and Dish will disable AutoHop feature for ABC programs until three days after the show airs. The way the entire industry is structured, it appears both the content owners and pay-TV operators have little choice but a marriage. Both of them can’t survive separately. While there is demand for content, there is a requirement of distribution of that content. We have seen in the past that sometimes content owners have an upper hand in the negotiations, as is evident from the CBS and Time Warner Cable dispute. However, this may not hold true in every situation. For instance, if Dish decided to drop Disney channels, it would have benefited on the cost front but at the same time it would have taken a significant hit on the subscriber count. Similarly, for Disney, if it was unable to strike a deal with Dish, a possible blackout would have eroded huge dollars in the form of subscription and advertising fees. Both the players are dependent on each other and a marriage eventually is the key for survival, especially for the popular networks and large pay-TV operators.

Understand How a Company’s Products Impact its Stock Price at Trefis

How Does The New Deal Benefit ABC?

Overall, it appears to be a good deal for Disney, especially over the AutoHop feature of Dish. In addition, Dish has agreed to carry Fusion, Disney Junior, ESPN Goal Line, ESPN Buzzer Beater, Longhorn and the upcoming SEC network, expected to launch in August 2014. The satellite company offers a DVR to its subscribers with a feature that removes commercials automatically from the recordings on DVR. While this sounds great for end users, the networks argue that the recording violates copyrights. The networks first sued Dish in May 2012. However, they have not been successful to get an injunction to bar Dish from offering its subscribers the AutoHop feature.

Broadcasters usually mint advertising dollars in first three days of content delivery and Dish disabling the AutoHop for first three days ensures Disney’s advertising dollars remain intact. Disney’s ABC broadcasting revenues are derived primarily from three sources – advertising, retransmission consent fees, and TV production and distribution. The growth in broadcasting largely depends on the programming being offered on the network. Usually CBS takes the lead among broadcasters due to its solid programming, especially through summer. So far in the 2013-14 broadcast television season, Comcast’s NBC is in first place among adults 18-49 with 19% jump in ratings from last season. FOX is second with 12% increase in ratings from last season. CBS was third down 23% in ratings from last season and ABC was fourth also down 9% from last season.

The overall estimated ABC revenues were $5.87 billion in 2013, around similar levels seen in 2012. However, we expect these to improve in coming years due to growth in retransmission consent fees and higher TV content and distribution revenues. We expect broadcasting revenues to reach the $7 billion mark by the end of our forecast period, reflecting an average annual growth rate of a little under 3%. However, there is a risk that can stall this growth. ABC’s effective ad pricing has not seen much growth in the past years and if there is any meaningful decline on that front, it can more than offset the growth at other two drivers. We are eager to see how 2014 will trend in terms of advertising spending and also if ABC can boost its ratings. Meanwhile, the new deal between the content owner and satellite service provider appears to be a boon for both the companies, especially Disney.

See More at Trefis | View Interactive Bernstein Research (Powered by Trefis)

Like our charts? Embed them in your own posts using the Trefis WordPress Plugin.

Source: Forbes Auto

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

IPad Air Giveaway 2014 is Online
IPad Air Giveaway 2014 is Online
Our sister site I4U News is giving away a brand new iPad Air or if you can wait an iPad Air 2. This is an $499 value.
 
 
Your Parent Or Kid Moved In: Are You Covered?
A record 57 million Americans now live in multigenerational family households — double the number in 1980, according to a new Pew Research Center study. And I bet many of them have the wrong homeowner’s or renters...
 
 
Pandora Looks to Challenge Terrestrial Radio's Dominance in Cars
Pandora Media is one of the largest Internet radio providers in the U.S. with more than 75 million active users. While the company’s active user count has increased at a robust pace historically, it is likely to slow...
 
 
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
It’s January 2026. New York Yankees owner Hal Steinbrenner gets out of his driverless car and triumphantly marches before the gathered press to introduce his prized new free agent. It’s a record-breaking contract—over...
 
 
 

Latest from the Network

Leave Islamabad's protest venue: Pakistan SC
Islamabad, Aug 27 (IANS) In the second such direction, the Supreme Court of Pakistan Wednesday ordered the two parties leading anti-government sit-in protests to clear out of Islamabad's Constitution Avenue area by...
Read more on Politics Balla
 
Kanye West's father was paparazzo
Kanye West's father used to be a paparazzo. The 'Bound 2' hitmaker revealed his dad Ray West was a photographer during his deposition last year after paparazzi Daniel Ramos sued the rapper for allegedly attacking him...
Read more on Celebrity Balla
 
Sandra Bullock, Jennifer Aniston say farewell to Chelsea Handler
Sandra Bullock, Jennifer Aniston and Miley Cyrus were among the stars that joined Chelsea Handler on the final episode of 'Chelsea Lately' last night (26.08.14). The 39-year-old funnywoman - who quit the E! talk show...
Read more on Celebrity Balla
 
Harry Styles gets friendly with rising star Meghan Trainor
Harry Styles has ''good chemistry'' with his new female pal Meghan Trainor. The 20-year-old hunk has got close to the beautiful blonde singer after meeting her in the US during One Direction's 'Where We Are' tour, and...
Read more on Celebrity Balla
 
Johnny Galecki and Kelli Garner split
Johnny Galecki and Kelli Garner have split after more than two years together. The 'Big Bang Theory' actor and 'Pan-Am' star , who were first seen in public together in March 2012, have amicably decided to end their...
Read more on Celebrity Balla
 
Robin Williams rejected $600k Vegas offer
Robin Williams rejected a $600,000 offer to headline two Las Vegas shows two years before his death. The 'Mrs Doubtfire' actor, was found hanged at his home on August 11, turned down the chance to headline two shows at...
Read more on Celebrity Balla
 
Grand Theft Auto makers slam 'publicity-seeking' Lindsay Lohan
The creators of 'Grand Theft Auto V' want Lindsay Lohan to be fined for suing them. Manufacturer Take-Two Interactive has called for the 'Mean Girls' actress' complaint to be dismissed after she claimed they used her...
Read more on Celebrity Balla
 
Natasha Lyonne dating Fred Armisen
Natasha Lyonne and Fred Armisen are reportedly dating. The 'Orange is the New Black' beauty and the 'Easy A' star appeared to make their relationship official after they were spotted looking cosy with one another at the...
Read more on Celebrity Balla
 
Karrueche Tran pokes fun at Blue Ivy's hair
Karrueche Tran has joked that Beyonce and Jay Z don't comb their daughter's hair. The 26-year-old model was hosting an episode of '106 & Park' on BET, in which she and co-host Brandon Broady were discussing the...
Read more on Celebrity Balla
 
NASA developing robot troops to explore alien worlds
Washington, Aug 27 (IANS) The US National Aeronautics and Space Administration (NASA) is developing a new troop of robots that could one day race across distant planets as a sort of space exploration vanguard. Dubbed...
Read more on Apple Balla