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Posted at 10:45 AM ET, 12/ 8/2010

Netflix strikes deal with ABC-Disney, building Internet video library

By Cecilia Kang


Netflix Wednesday announced a licensing deal with Disney-ABC Television to stream hundreds of shows and movies such as "Ugly Betty" and "Desperate Housewives," building on the online television provider's growing library of content.

Subscribers of Netflix's monthly Internet streaming membership, which is competing directly with cable and satellite television services, will have access to those shows but no earlier than 15 days after their initial telecast, according to a release.

The race for to deliver videos over the Internet has pitted newcomers such as Google TV, Apple TV and Hulu against powerful cable, satellite and telecom services that for years have become the main source of television access.

Netflix has emerged as the biggest threat to those firms, according to analysts, and has done so by brokering deals with programmers such as a $1 billion contract with MGM, Lionsgate and Paramount to stream movies to subscribers the same day they hit theaters. Already, about 20 percent of all residential broadband traffic during peak hours at night is from consumers watching Netflix videos, according to Sandive, an analytics firm.

Time WarnerCEO Jeff Bewkes on Tuesday downplayed the threat of Netflix, saying content creators won't be willing to take low licensing fee offers from the company, according to a report by The Hollywood Reporter. He said "Large aggregation at a low price is not particularly useful" to content creators or consumers.

The deal includes past episodes of "Grey's Anatomy," "Desperate Housewives" and "Brothers & Sisters." Every episode of "Lost" and "Ugly Betty" also will be included. Disney Channel shows like "Phineas and Ferb" will also be streamed to Netflix users.

"Adding to our existing Disney-ABC lineup with great network and cable shows, and opening up ABC Family for the first time, are important steps in creating a wide and diverse selection of content Netflix members of all ages can watch," said Ted Sarandos, Netflix's chief content officer, in a news release.

Another threat to Netflix could be a move by the Federal Communications Commission to bless usage-based pricing from Internet service providers. That policy could make online video streaming -- which gobbles up bandwidth -- less attractive for consumers.

Related stories:

Pay-as-you-go Internet prices raise questions

Battling over future of TV

By Cecilia Kang  | December 8, 2010; 10:45 AM ET
Categories:  Comcast, FCC, Google, Net Neutrality, Online Video  
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Next: Q&A: Earthlink's take on Comcast-NBC merger, broadband prices could go up

Comments

No Closed Captions: Lost in all the news about Netflix's streaming revolution is the fact that Netflix is ignoring people who are hearing impaired, of which there are an estimated 30 million in America, about a third of which are under the age of 45. If you are watching the movie on your PC, many - if not most - of the films have closed captioning. But on a set top box, like Roku, or whatever, there is no closed captioning. Netflix makes weak excuses about the problem, citing technology. Well, Hulu.com seems to have no problem with the technology. Come on, Netflix. Wake up!

Posted by: allanc8164 | December 8, 2010 12:04 PM | Report abuse

I watch a lot of Netflix instant streaming. I will not be happy if a pay as you go policy is enforced.

Posted by: ctree | December 8, 2010 2:47 PM | Report abuse

Watching a movie streamed via Netflix OUGHT to cost more than watching it as a broadcast, because a "unicast" - a custom stream just to you - consumes resources that are much more expensive. Ultimately, it should probably cost a couple of bucks per movie. This isn't price gouging; it's what is needed to pay for broadband infrastructure and to pay the people who make the movies (whose budgets run into many millions of dollars).

Posted by: LBrettGlass | December 8, 2010 5:30 PM | Report abuse

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