ABC Works on an App for Live Streaming Shows to Mobile Devices
THE WALT DISNEYCompany, while sorting out the future of the online video Web site Hulu, has an app in the works that may render Hulu passé for some people.
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Andy Forssell will become acting chief at Hulu when Jason Kilar steps down.
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The app will live stream ABC programming to the phones and tablets of cable and satellite subscribers, allowing those subscribers to watch “Good Morning America” on a tablet while standing in line at Starbucks, for instance, or watch “Nashville” on a smartphone while riding a bus home from work. The app could become available to some subscribers this year, according to people briefed on the project, who insisted on anonymity because they were not authorized to speak about it publicly.
With the app, ABC, a subsidiary of Disney, will become the first of the American broadcasters to provide a live Internet stream of national and local programming to people who pay for cable or satellite. The subscriber-only arrangement, sometimes called TV Everywhere in industry circles, preserves the cable business model that is crucial to the bottom lines of broadcasters, while giving subscribers more of what they seem to want — mobile access to TV shows. The arrangement could extend the reach of ads that appear on ABC as well.
Disney already distributes similar live streaming and on-demand apps, known as “Watch” apps, for ESPN and the Disney Channel. Special hurdles exist, however, for the ABC app, in part because of contracts between the network and the companies that produce some of its shows that were written before mobile phone video streaming was even possible. Other complexities involve ABC’s local stations, which might — if not courted properly — feel threatened by an app.
But ABC, seeing shifts in consumer behavior, is pressing forward. It has started to talk with stations about how to include them in the live streaming app. Illustrating the difficult contractual issues, ABC offhandedly first mentioned a forthcoming Watch ABC app in a news release nine months ago, when it signed a deal with Comcast to make several Watch Disney apps available to Comcast subscribers.
But the network live streaming ability is inching closer to fruition, the people briefed on the project said. A spokesman for ABC declined to comment.
Executives at other networks who have heard about the ABC plan regard it with a mixture of awe and fear. No other broadcaster is believed to be as far along as ABC, which is also the first broadcaster to sell TV episodes through Apple’s iTunes store and the first to stream free episodes on its Web site.
Subscriber-only apps like Watch Disney and, eventually, Watch ABC stand in stark contrast to the free-to-all content available on Hulu, the online video site that is co-owned by Disney, Comcast and News Corporation. Comcast is a silent partner. The other two companies are debating what to do with the six-year-old Web site, which has lost most of its original executive backers at NBC and Fox and will soon lose its founding chief executive, Jason Kilar.
Last week, when Mr. Kilar, who is stepping down this month, named an acting chief executive, Andy Forssell, he wrote in a message to staff members that “Disney and News Corporation are currently finalizing their forward-looking plans with Hulu, and the senior team has been working closely with them in that process. Once the plans are finalized, a permanent decision will be made regarding the C.E.O. position.”
Hulu has been an innovator in both the Web streaming and the advertising arenas, forcing media companies to think about how their TV shows should be distributed online. But it has been marginalized as the companies seek out more lucrative revenue streams.
Under one plan discussed recently, according to several people with ties to Hulu, Disney would buy out the other co-owners’ stakes in the company. But the opposite could happen, too, with News Corporation as the buyer. Or the two companies may choose to sell Hulu to a third party, if one shows interest.
The companies could also retain their stakes in Hulu and change the business model. Disney is said to be more supportive of the free, ad-supported model that it is most closely associated with; News Corporation is more supportive of Hulu Plus, the monthly subscription service that is an add-on to the free Hulu site. Mr. Kilar, in his message last week, did not indicate when any change could take place.
Whatever happens, the owners appear more interested in maintaining their existing relationships with cable and satellite companies. That is what an app like Watch ABC would do. It would protect the cable model while providing a good example of how authentication — the idea that people log in to prove they have a subscription — works.
A few cable and satellite companies already have their own products that allow ABC and other broadcasters to be streamed on devices. But for most Americans, it remains difficult to place-shift a show — say, to watch a local nightly newscast live on an iPhone.
A start-up company that is being sued by Disney and several other major media companies, Aereo, has made that possible by installing an antenna farm in New York; some analysts have said Aereo might motivate broadcasters to make their own live streams more freely available on their own terms. But James L. McQuivey, a digital media analyst at Forrester and the author of the book “Digital Disruption,” said he thought ABC’s plan wasn’t a rebuttal to the start-up.
“This and Aereo are both a response to the fact that people are habitually connected to live viewing,” he said. “The Internet will gradually undo that,” he predicted, “but it’s being very gradual about that for the time being.”
Brooks Barnes contributed reporting.