ABC's Appealing Deal

The spark that ignited multiplatforms

Apple CEO Steve Jobs announced last October that Disney would provide video of popular shows from ABC and Disney Channel, the first networks ever to offer pay-for-download video through iTunes. The announcement acted as an alarm clock that woke marketers up to the opportunities in new media. For this pioneering partnership, Apple and ABC each earn a Brand Builder award.

The deal, under which ABC hits including Lost and Desperate Housewives were made available for $1.99 an episode, bolstered both ABC and Apple. iTunes, the largest legal music-download service, quickly became the place broadcast and cable networks wanted to go to distribute their video content.

The move opened what could be an enormous new revenue stream for the network, which has made no bones about wanting to find different ways to capitalize on the content it provides free to consumers. Going with the strong-branded Apple, which boasts some 80% of the legal music-download business, was a smart choice for the also strong-branded ABC.

ABC has been careful about funneling its programming to digital outlets. It has not released content to others, such as Google Video, which displays various networks' shows together on one page. iTunes provides a more distinct branded environment, as well as a simpler search function for users.

“When you get to a world where digital media's gatekeepers have gone away and consumers can access content any which way they want, branding becomes all the more important,” says Albert Cheng, executive VP of digital media for the Disney-ABC Television Group.

Since the ABC deal, the other broadcast networks and a slew of cable networks have offered their series via iTunes. The service reports that it has facilitated more than 30 million video downloads as of this month. Disney reports that more than 6 million of those downloads are for its programming (including content from ABC, ESPN, the Disney-ABC cable networks and animated shorts from Walt Disney Feature Animation).

ABC also launched a broadband site this spring to stream free, ad-supported episodes of hit shows including Desperate Housewives and Lost. In May, there were more than 11 million streams to the site. Earlier this month, began streaming free, ad-supported episodes of its own series, drawing 11 million streams in just the first three days.

“Our digital-media efforts will help us strengthen our connection with our consumers,” says Disney Media Networks Co-Chair/Disney-ABC Television Group President Anne Sweeney. “Stay tuned, because this is just the beginning.”