LOS ANGELES – Shows from ESPN, Disney Family, and ABC hits "Lost" and "Desperate Housewives" are among the slate of programming The Walt Disney Co. (DIS) has licensed for viewing on Comcast Corp.'s (CMCSA) video-on-demand service.
The licensing deal is part of a multibillion-dollar distribution agreement struck by the two companies on Tuesday and represents the first time Disney offers ABC broadcast programs over a cable video-on-demand service.
Video on demand services let digital subscribers watch archived shows and movies at any time.
As part of the multiyear deal, Comcast, the country's largest cable TV operator, also agreed to buy Disney's 39.5 percent stake in the E! Entertainment Television channel for $1.23 billion. Comcast currently holds a 60 percent interest in the channel.
No other financial terms of the deal were disclosed.
The pact also extends a content distribution agreement for the 10 ABC-owned broadcast television stations and many of Disney's TV networks, including Disney Channel, ABC Family, Toon Disney, ESPN, and ESPN2, among others, the companies said.
Comcast will launch a Spanish-language sports network dubbed ESPN Deportes, the companies said.
Disney has agreed to allow Comcast to distribute episodes of "Desperate Housewives," "Lost" and two unspecified new fall programs through the on-demand service for free within 12 hours of airing beginning in the fall of 2007. The cable giant will also add "World News with Charles Gibson," "Nightline" and "This Week" to its on-demand roster.
The ABC programming will be available through the on-demand service only to Comcast digital cable customers in seven markets served by ABC-owned TV stations: New York, Philadelphia, Chicago, San Francisco, Houston, Fresno and Flint, Mich.
Content from ESPN, the Disney Channel, Toon Disney and SOAPnet will also be available through the vide-on-demand service in markets where those cable channels are offered.
The deal also gives Comcast access to Disney, Miramax and Touchstone movies, with new releases available to customers for $3.99 and older ones for $2.99. Titles will include "Pirates of the Caribbean: Dead Man's Chest" and "The Prestige," among others.
"This is one of the broadest distribution agreements in the history of our company," Disney President and CEO Robert Iger said in a prepared statement.
Added Comcast Chairman and CEO Brian Roberts: "This agreement reflects our ability to distribute content on multiple platforms and signals another first for Comcast and Disney as we continue to explore the evolving possibilities of digital technology."
The two companies have been linked for a long time. In 2004, Comcast proposed buying Disney for about $54 billion in stock, but Comcast withdrew its bid after twice being rebuffed by Disney.
Cable companies have said they want to offer TV shows on demand for 99 cents per episode and show movies on demand the same day they become available on DVD, instead of weeks later.
Disney has been renegotiating its cable deals in recent years, favoring longer terms that provide a steady stream of income.
Earlier this year, Comcast, CBS Corp. and General Motors Corp. tested the concept of showing prime time TV shows on-demand for free for digital cable subscribers in Philadelphia, Baltimore, Chicago and Detroit.
CBS already offers prime time shows such as "Amazing Race," and "CSI: Crime Scene Investigation" through Comcast's video-on-demand network for 99 cents each.
Shares of Walt Disney climbed 11 cents on the New York Stock Exchange to close Tuesday at $33.23, near the upper-end of its 52-week trading range of $23.77-$33.85. Shares of Comcast declined by 11 cents on the Nasdaq Stock Market to $40.68, near the upper-end of its 52-week trading range of $25.35-$41.20.