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Disney to Put ABC Shows Online for Free

ABC will offer four prime-time shows including "Desperate Housewives" and "Lost" on its Web site for free for two months beginning in May as it continues to expand the ways consumers can watch TV online.

The shows will include advertising that cannot be skipped over during viewing. ABC, which is owned by The Walt Disney Co. (DIS), already offers ad-free episodes for $1.99 each on Apple Computer Inc.'s (AAPL) iTunes store.

The offerings on the ABC.com Web site will also include current episodes of "Commander in Chief," as well as the entire season of "Alias," and will be available through June. New episodes will be available online the day after they run on ABC.

The shows will be supported by advertisers, including AT&T Inc. (T), Ford Motor Co. (F), Procter & Gamble Co. (PG), Toyota Motor Corp. (TM) and Unilever PLC (UL), among others.

The experiment comes as networks try to reach viewers who watch less TV in prime-time and are embracing technology that lets them watch shows on computers and portable devices, such as an iPod.

"It's an opportunity for us to learn more about a different model," Anne Sweeney, president of Disney-ABC Television Group, said in a panel discussion Monday at the cable industry's annual convention in Atlanta.

"None of us can live in a world of just one business model. This is about the consumer, and how the consumers use all this new technology. It's consumer first, business model second."

ABC was the first network to sell TV episodes online. Since then others, including NBC, CBS and several cable networks, have offered shows on iTunes, their own Web sites and on Google Inc.'s (GOOG) new video store. Time Warner Inc.'s (TWX) AOL recently launched in2TV, which streams episodes of classic TV shows with ads.

ABC is working with advertisers to try new, interactive ads that will appear in the shows and will also offer sponsorships. Viewers will be able to pause the shows and skip to various "chapters," but will not be able to fast forward through the ads.

Sweeney said that ABC would be cautious about other distribution deals, being careful to safeguard against piracy, ensure reliability of the technology, and make sure any deals are compatible with ABC brands. Whether such ventures are supported by marketing is also a concern, she said.

Sweeney said ABC had already rejected several other deals for possible distribution of TV shows, but she declined to say which ones.

"You're not going to see us on every single platform," she said.

ABC has not made shows available on Google's video store. ABC has also not yet signed any agreements with cable companies to distribute its hit prime-time shows for on-demand replay services offered on cable, although Sweeney said they were in active talks with several providers.

ABC also said it will continue discussions with its local affiliate stations on ways to share revenue from online ad sales. Affiliates, as well as unions representing actors and writers, have sought a bigger cut of online revenue.

"Our ultimate goal is to find an effective online model, one in which our affiliates can take part," Alex Wallau, president, operations and administration, ABC Television Network, said in a statement.

The Disney-ABC TV group also said Monday it will launch a broadband channel for soap opera viewers on April 17, available to Verizon Communications Inc. (VZ) consumer broadband customers, called Soapnetic.

Shares of The Walt Disney Co. rose 30 cents to $27.83 in afternoon trading on the New York Stock Exchange. That is closer to the higher end of their 52-week range of $22.89 to $28.85.