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Disney, Comcast near video deal

Under the multiyear agreement, the TV cable operator would distribute Disney , ABC and ESPN programs through its on-demand service.

By ASSOCIATED PRESS
Published November 22, 2006

Comcast Corp. plans to announce soon a landmark multibillion-dollar deal with the Walt Disney Co. to distribute Disney content through its video-on-demand service.

As part of the deal, the country's largest cable TV operator will also buy Disney's stake in the E! Entertainment Television channel.

Under the multiyear agreement, Comcast would spend about $1-billion annually to purchase programming such as the popular ABC shows Desperate Housewives and Lost, as well as other content from ESPN, the Disney Channel and Toon Disney, according to an unnamed person close to the deal who, according to the Associated Press, spoke on condition of anonymity.

Philadelphia's Comcast would also acquire Disney's 39.5 percent stake in the E! Entertainment Television channel for about $1.2-billion as part of the deal. Comcast currently holds a 60 percent interest in the channel.

The deal would be the first and biggest of its kind for Comcast, the person said.

Disney has agreed to allow Comcast to distribute episodes of Desperate Housewives, Lost and two unspecified new fall programs through the on-demand service for free within 12 hours of airing. The cable giant will also add World News with Charles Gibson, Nightline and This Week to its on-demand roster.

The deal is a big prize for Comcast, because it gives the company access to Disney, Miramax and Touchstone movies, with new releases available to customers for $3.99 and older ones for $2.99. Titles will include Pirates of the Caribbean: Dead Man's Chest and The Prestige, among others.

Katina Arnold, a Disney spokeswoman, declined to comment on reports of a deal between Comcast and the company.

The two companies have been linked for a long time. In 2004, Comcast proposed buying Disney for about $54-billion in stock, but Comcast withdrew its bid after twice being rebuffed by Disney.

Disney said previously it was negotiating new multiyear deals with Comcast and Time Warner Cable.

The talks have dragged on for years and been delayed as media companies experiment with new ways to deliver content to consumers, including selling TV episodes online and offering free, advertising-supported streaming versions on network Web sites.

Cable companies have said they want to offer TV shows on demand for 99 cents per episode and show movies on demand the same day they become available on DVD, instead of weeks later.

Disney has been renegotiating its cable deals in recent years, favoring longer terms that provide a steady stream of income.

CBS already offers prime time shows such as Amazing Race, and CSI: Crime Scene Investigation through Comcast's video-on-demand network for 99 cents each.

[Last modified November 21, 2006, 23:42:58]