Fox might not be the only broadcaster to begin restricting access to its shows online and requiring next-day viewers to be pay TV subscribers. Disney is also working out deals with distributors that would allow viewers to watch shows sooner if they log on with a cable ID.
On Disney’s earnings call Tuesday, Disney CEO Bob Iger said that the company is in discussions to provide the same type of TV Everywhere-type authentication that has become widely used by cable networks like HBO and CNN. The plan is a bit of a departure from deals that the company has done so far with online distributors like Netflix, and is meant to appease its cable and satellite distribution partners.
“Our overall approach… has been to make deals that increase revenue while at the same time protect and respect the channel distribution value that we see today,” Iger said. Until now, that meant striking deals for library content and TV shows that aren’t in season. But Disney is looking to build authentication into future deals, Iger said, which would “allow access to our programming faster or in a more aggressive window if the customer is a multichannel subscriber.”
While HBO and other cable networks have been rolling out their TV Everywhere offerings over the last two years, it’s only recently that broadcasters began talking about authenticating their content. Part of the reason is that they had already made their shows available for free online, through Hulu and network sites like Fox.com and ABC.com.
That all changed last month when Fox announced that it would limit access to shows the day after they air, except to viewers who have logged in with their cable IDs. Everyone else will have to wait eight days to view that content on Fox.com or Hulu. The authentication plan will launch next week, but so far, only one distribution partner — Dish Network — has signed up to let its subscribers view the content.
Disney might be interested in implementing the same sort of TV Everywhere plan as Fox, but Iger admitted that it has yet to work authentication into any of its deals with distributors of its ABC broadcast network. It has struck deals with Time Warner Cable and Verizon FiOS to authenticate ESPN and the sports network’s live mobile app. However, while Iger said that the app has been downloaded more than 2.5 million times, it can only be used by a small percentage of pay TV subscribers.
Limiting streaming access to authenticated customers might lower the number of viewers who tune in online, but the plan could help broadcasters like ABC and Fox extract more revenues from distributors through retransmission deals. On the call, Iger said he expects revenues from retrans deals to grow to $400-$500 million by 2015.