NEW YORK — Comcast and Disney inked an online distribution deal, proving the companies can work together despite a nasty takeover battle that ended three months ago.
The deal brings streaming video from ABC News, including “World News Tonight” and “Nightline,” to the Comcast broadband portal, as well as Disney Connection to an online Kid’s Channel to launch in the fall.
Comcast is the nation’s largest broadband provider with 5.7 million households, 40% of which include children.
Comcast paid a license fee to Disney as part of the deal, but both sides expect that amoung to be dwarfed by revenues generated by subscription fees, which the companies will share.
Deal involves Disney’s paid gaming services, Disney Blast and Toontown Online, which retail online for $49 and $10 a month, respectively. Comcast members will be able to sample the services before subscribing for a discounted rate.
Comcast and Disney declined to give specifics on the revenue split, except that both parties expect the arrangement to generate “tens of millions” of dollars over the five-year life of the deal.
The launch of Comcast’s online Kid’s Channel corresponds with the reported development of a similar video channel, which will include content from a variety of sources, including Sesame Workshop. The online channel will include programming from sources other than Disney.
The deal is part of Comcast’s move to win high-speed data subscribers from the telcos, which have forged content partnerships with Yahoo! and Microsoft. For Disney, the deal is a new distribution channel for its paid online products. It’s the first time Disney Connection has been made available in the U.S.
The deal, which has been in the works for a year, was negotiated during Comcast’s takeover attempt of Disney, which was rejected by Disney’s board.
The companies have yet to agree to a contract extension for ESPN, which is set to expire next year.