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Upshot of Disney and Comcast Deal: Bundling and No Blackouts

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Disney and Comcast have struck a comprehensive, 10-year distribution deal, covering 70 Disney networks and services including ESPN and ABC.

It gives Comcast’s XFinity customers access not just to TV content, but also to live streaming and on demand content online and on tablets and smartphones.

The terms of the deal were not disclosed.

Here’s how it came about

Comcast’s deal with Disney for ABC Family, Disney Channel, Disney XD, and Soap Net, expired at the end of 2011. Instead of just renewing those channels, Comcast and Disney negotiated deals for all Disney content, including all 12 ESPN channels, 7 ABC-owned broadcast stations and more than 10 high-def networks.

Why Now?

Comcast and Disney’s contract for ESPN and ABC retransmission are not near expiring, so there was no time pressure to do such an inclusive deal. But by getting all of these negotiations out of the way, the content and distribution giant ensure that there are no blackouts, like the ones that have plagued cable companies like Time Warner Cable and media companies like News Corp in recent years.

What makes this deal different? Digital This deal includes more digital access to Disney/ABC content both live and on-demand, on multiple platforms. For the first time Comcast subscribers will have access to the WatchESPN app. And the two companies say they’ll collaborate to make Disney shows available through new technology. The deal does not change Disney’s distribution of TV shows through Hulu or abc.com.

What hasn’t changed? Bundling

This deal locks in Comcast and Disney to protecting their content bundles. Disney’s selling a bundle of channels to Comcast, which it will continue to sell to consumers as a bundle. Neither company wants consumers to be able to subscribe to individual content—otherwise sports fans would just pay for ESPN, and not basic cable, and movie buffs would opt for just HBO and Showtime, without paying for those pricey sport channels. This deal eliminates uncertainty for both companies, and it diminishes the chance that consumers will have real access to a la carte content in the next decade.

Note: Comcast is the majority owner of NBC Universal, the parent of CNBC and CNBC.com.

Questions? Comments? MediaMoney@cnbc.com

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.