• by David Goetzl  @dgoetzl, June 7, 2007

A top Disney executive said this week the proposed deal to offer ABC shows on VOD with the ad-zapping capabilities disabled was not driven by a desire to circumvent DVR growth.

"It's not about trying to force a certain solution vis-à-vis DVRs or not," said Tom Staggs, Disney CFO, at an investor event. "It is an example of taking advantage of platform capabilities ... that I think can be positive for the business over the long run." His stance goes against a widely held belief that the deal to run a test with a Southern California cable operator this fall was at least partly aimed at experimenting with ways to blunt consumer ad avoidance.

The deal between Disney and Cox cable--which has not been finalized--calls for ABC hits to be available on VOD the day after broadcast. They would air with ads that can't be skipped, since the fast-forward button won't work. ABC shows "Desperate Housewives" and "Grey's Anatomy" will be included, as will some college football games from sister network ESPN.

Over time, the deal could lead to new revenue streams for both programmers like ABC and cable operators, via sharing proceeds from the ad dollars.

Staggs did indicate that healthy ad-supported TV is a benefit to consumers, and this deal is an example of the view-ads-for-free-content bargain that goes with that. "A robust ad model is in the interests of the consumer and the advertiser and certainly the programmer," he said. "I think you'll see that continue."

To a certain degree, DVRs and VOD don't form an apples-to-apples situation. A cable operator could have control over ad-skipping options within VOD, while consumer control over DVRs would seem to be harder to impede. However, technology presumably could be developed to prevent ads within a DVR-recorded show from being skipped. That tack, however, could provoke significant consumer backlash.

Staggs said a Cox and Disney deal will offer marketers the opportunity for dynamic ad insertion, where an advertiser can change the spots on the VOD system to reflect needs for new creative. It's all part of Disney's goal to make its content as widely available as possible, provided there is the potential for monetization.

The idea is predicated on the idea that we can "create an enhanced consumer experience," he said. "We fundamentally believe that to the extent we continue to have strong accessibility of our product in a positive consumer experience ... and a business model that makes sense, we're going to be fine in the long run."

The test is scheduled to take place on Cox systems in Orange County, Calif., and perhaps additional markets.