• by Wayne Friedman , April 11, 2006

Breaking new ground in on-demand Internet TV program viewing, Disney-ABC Television Group will offer, in May and June on ABC.com, free full-length, next-day episodes of "Lost," "Desperate Housewives," "Commander-In-Chief," as well as the entire current season of "Alias."

One big change versus its ground-breaking iTunes program deal last fall is that all shows will have TV-like advertising. Advertisers for the new initiative include AT&T, Cingular Wireless, Ford Motor, Procter & Gamble, Toyota Motor Sales, Unilever's Suave, Universal Pictures, and Walt Disney Pictures.

But ABC says the May/June free program Internet push will not be with traditional TV ads seen on its original ABC network airing. Commercial messages will be presented in unusual formats, which will include advertising-sponsored online games.

While networks have offered specific episodes of prime-time series for free from time to time on the Internet, ABC becomes the first broadcast network to make multiple series available for free.

Just like with DVDs, viewers on ABC.com can pause and move back and forth between "chapters" within each episode. But viewers will not have the ability to fast-forward through advertisements--a video viewer activity that strikes fear into many marketers. Episodes will be streamed in large video format 16x9 cinema-like format.

After a rash of alternative on-demand Internet, VOD, and DVR deals for $1.99 a download, media companies have increasingly moved to experiment with more with traditional advertiser involvement of TV program distribution--in which viewers can view TV shows for free. A number of recent studies suggest that more viewers prefer free downloads or streaming videos with advertising rather than the $1.99 pay model.

In this regard, Anne Sweeney, co-chair, Disney Media Networks, said in a statement: "In the future, consumers will rely more and more on strong brands to help them navigate the digital world."

Some executives are concerned about what this might do to ABC TV affiliates. May is a big sweep period, during which stations still set advertising rates for the coming year. ABC is calling this move an "experiment"--which is how this might be played to its stations, say analysts.

May sweep is still crucial," says Shari Ann Brill, vice president-director of program services for Carat USA. "I'm sure the reaction from stations wasn't that good."

Down the road, Brill believes if this is successful, it might usurp the growing DVR business. "It will hurt the DVR model," she says. "There will be extra impressions if streaming becoming popular." Brill is unsure how in the future Nielsen might combine Internet and traditional broadcast ratings for marketers.

Disney-ABC also announced "Soapnetic," the first-ever broadband channel dedicated to all nine of Disney ABC's current soaps. This is an extension of its cable network SOAPnet. Soapnetic will be accessible to Verizon customers.