Cable Operators

Disney, ESPN Prep New VOD Strategy

4/03/2005 8:00 PM Eastern

Sidebars:


ESPN Broadband Goes 360

The programming networks inside The Walt Disney Co. are overhauling their video-on-demand strategies and developing a cross-brand programming initiative that combines content from ESPN, Disney Channel, Toon Disney, SoapNet, Jetix, ABC Family, Radio Disney and ABC.

“We’re bringing a broad comprehensive VOD offering to the marketplace,” said Albert Cheng, senior vice president of sales strategy and business development for Disney and ESPN Networks. The initiative covers a wide range of sports, entertainment and children’s programming. And it comes after both a strategic review of the company’s VOD offerings and the integration of both sales teams under one affiliate banner.

For instance, ESPN has pulled its original VOD lineup from the marketplace. Its mix of SportsCentury and other programming, sold either a la carte or via subscription VOD, didn’t work for the operator or ESPN, said Matt Murphy, senior vice president of broadband and interactive sales at ESPN. “Neither of those business models makes much of a business,” he said.

But Disney has an SVOD offering for Disney and Playhouse Disney with Insight Communications Co., Cablevision Systems Corp., RCN Corp. and Blue Ridge Communications, among others. And the experience working with those operators has formed the basis of the new strategy. As the company beefs up its VOD offerings, it remains steadfast in its message that strong programming requires some form of compensation, and it is heartened by MSO comments that cable is ready to pay for some VOD product.

“We have great brands and content, and a VOD offering that gets cable competitive,” Cheng said. “It will be content not found anywhere else, unique to VOD. We view it as a product that will differentiate [cable] from satellite.

“We expect to be compensated for it monetarily,” he said. “We’re still looking at the right structure. This is not free to the operator. We’ve undertaken quite a bit of investment. There is a content factor in these brands. We expect some fare compensation.” Cheng contends that there is now a willingness to discuss compensation.

Disney plans to offer 50 to 100 hours a month across its networks, with 25% of the content being refreshed each week, Cheng said. Disney is formulating the packages now, going through rights clearances and assessing what’s been popular to date on VOD.

“We’ve completely overhauled our VOD offering,” Murphy said. “None of this is repurposed. We have now 100% original exclusive content.”

ESPN plans to offer daily segments of Pardon the Interruption, daily and weekly news recaps, plus analysis of college basketball and other sports.

The daily news segments will present a delivery challenge, but, Murphy said, “We’re working on a solution on how to deliver content in a timely manner. We’re almost ready to do a test.”

Condensed college football and basketball games, a la NFL On Demand, are another possibility, Murphy said, as are bonus episodes of original fare like Tilt, as well as outdoor programming.

As for Disney’s VOD, Cheng said, “The most popular programming on linear is the most popular programming on VOD. It will be a mixture what they have seen and new programming for the VOD platform.”

Premiering new series episodes on VOD is another tactic Disney will continue to pursue, Cheng said. “Premieres are a huge thing for VOD,” he said. When new That’s so Raven episodes premiered on VOD, views per show rose 78% at one MSO, Cheng said.

Adding to the mix, Radio Disney will provide about 100 music videos a year to the service. And Disney also is reaching across the aisle to another corporate sibling, providing ABC-TV-owned content to the VOD lineup — both primetime and late night. The list includes some of ABC’s reality programming, library titles like Line of Fire and Life with Bonnie and perhaps late night fare like The Jimmy Kimmel Show, Cheng said.

Advertising support remains a longer term-possibility. “It’s still a little early, but we’re interested in learning more about it,” Cheng said. “We believe it’s a potential revenue stream, but we don’t believe it is the only revenue stream.”

Added Murphy: “Our ad sales department is hearing there is clearly an interest to start exploring these types of opportunities. Times are changing. People’s viewership habits are changing. There is a willingness to experiment with new things.”

One of the challenges will be allowing customers to find such disparate content across the VOD platform. While some operators place network content on their own “channel,” other operators use more generic content-navigation setups.

“Navigation will be one of the key areas where operators will have to create a great consumer experience,” Cheng said. For Cheng and Murphy, brand groupings make the most sense, with an adequate search capability.

“It behooves operators to utilize the brands,” Murphy said. “People gravitate to brands.”

March