Disney Drops The E!, Strikes Digital Deal With Comcast

Comcast Corp. and Walt Disney Co. took care of three long-term problems in one major deal--digital TV distribution, cable carriage of ABC stations and networks, and resolution of its partnership in E! Networks.

The companies agreed to extend their distribution agreement with a new 10-year pact that covers the 10 ABC owned-and-operated channels as well as Disney Channel, ABC Family, Toon Disney, ESPN, ESPN2, ESPN Classic, ESPNEWS, ESPN HD and increased carriage of SOAPnet.

As part of the deal, Disney has sold its 39.5% stake in E! Networks, which includes E! Entertainment Television and Style Network, to Comcast for $1.23 billion.

Walt Disney also made a wide-ranging video on-demand deal for movies, TV shows, and news programming. Theatrical movies will be available on Comcast's On Demand video-on-demand service, with new releases costing $3.99 and library content going for $2.99.

Next fall, ABC will be making its prime-time shows and news content available for free through Comcast's "On Demand" service, including "Lost" and "Desperate Housewives" and two other new prime-time shows the day after their initial broadcast in ABC-owned television station markets. These shows will carry advertising. Shows such as "Lost" and "Desperate Housewives" will also be available in high definition to HD VOD-capable subscribers.

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While other networks such as CBS and NBC have already made previous deals with Comcast, for ABC this is its first deal outside its historic iTunes Music Store deal, which provides advertising-free content to cable consumers for $1.99, and its own ABC.com, which offers advertising-supported content free to consumers.

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