ABC & AFFILIATES REACH UNPRECEDENTED ARRANGEMENT TO EXPAND ADVERTISING-SUPPORTED, FAST-FORWARD DISABLED VIDEO-ON-DEMAND OFFERINGS

Dedicated to expanding its network and channel brands across multiple platforms and connecting viewers with their favorite shows anytime and anywhere, Disney-ABC Television Group announced today a ground-breaking arrangement between ABC and its Affiliate Association which greatly expands the network's ability to make content available on an on-demand basis through cable, DBS and Telco distributors. The agreement allows local affiliates to participate in the "fast-forwarding disabled" VOD offering through local advertising sales opportunities.

Additionally, this landmark agreement lifts ABC's repurposing restrictions, allowing for expanded opportunities to repurpose network programming at any time through this VOD arrangement, as well as through download services, including iTunes and Xbox, with whom ABC has current distribution deals.

"We remain focused on our consumers and finding innovative ways to make our content more widely available to them; and we believe that this can be achieved by continuing to evolve the ways we work with our distribution and advertising partners," said Anne Sweeney, co-chair, Disney Media Networks, and president, Disney-ABC Television Group. "This new arrangement provides further proof of the dedication the network and our affiliates have to working together in unique and inventive ways to create new opportunities that build all of our businesses."

Under the new agreement, ABC will provide network programs through a local advertising- supported video-on-demand service in both owned and non-owned station markets to cable, DBS, telco and land-line operators who agree to disable the "fast-forwarding" capability. The number of commercials in the VOD episodes is still being determined, but will be less than the number featured during a live broadcast. Each broadcast affiliate will have the opportunity to insert one locally-sold, 30-second commercial spot within each half-hour of programming in those markets where ABC VOD is available.

Ray Cole, chairman, ABC Television Affiliates Association, said: "The ABC Affiliate Board has endorsed this plan and recommends it to the affiliate membership. We believe that it includes many important, affiliate-friendly features which provide an opportunity for local ABC stations to share in the economics of video-on-demand. Importantly, it also serves as further affirmation of the constructive efforts of Anne Sweeney and her team to work with affiliates in a manner that strengthens and builds upon the traditional national network/local affiliate partnership. Affiliates are committed to working with the network to create new, reciprocal business opportunities in both existing and new media."

"This new agreement is a win-win for everyone. Our broadcast affiliates gain incremental revenue and promotional opportunities; our cable, satellite and telco partners will now have the opportunity to grow their on-demand offerings; our advertisers have an additional platform to add to their mix; and most importantly, the desire of consumers to have additional access to our programming is fulfilled," said Ben Pyne, president, Global Distribution, Disney Media Networks. "As we've seen in our previous experimenting in the on-demand space, the knowledge gained by programmers, operators and advertisers collaborating together benefits the entire industry, as we all look for inventive ways to evolve our businesses."

For the past several months, ABC and Cox Communications have been participating in a free VOD trial in Orange County, CA, which involves disabling the fast-forward option for all offered ABC content. Initial research conducted by Knowledge Networks/Statistical Research in Cox's Orange County service area regarding this trial shows users of fast-forwarding disabled VOD overwhelmingly(93%) find the advertising acceptable in exchange for gaining free access to their favorite shows. The research also shows that the addition of ABC series to their On DEMAND offering has grown new usage of the platform and increased frequency of usage by previous On DEMAND users. The availability of the shows On DEMAND also influenced behavior with 20%, citing that they used the My Primetime On DEMAND offering rather than using their DVR. Research also shows that On DEMAND usage adds incremental viewership to ABC series, with 27% of those surveyed saying that they would not have watched the shows at all had they not been available through My Primetime On DEMAND.

"Cox customers in Orange County roared their approval of the free ad-supported ABC content made available in the My Primetime category of our On DEMAND service," said Cox Communications President Pat Esser. "Customer behavior and response to our follow-up survey questions indicated that they really liked having access to these popular shows via On DEMAND, that they wanted more content and that they did not mind being exposed to advertising. We are very pleased to be a part of this innovative approach to enhancing consumer value while protecting stakeholder interests in the ad-supported TV model; we look forward to expanding My Primetime with ABC and other broadcast networks."

Disney-ABC Television Group is home to all of The Walt Disney Company's worldwide entertainment and news television properties. The Group includes the ABC Television Network, Disney Channel's worldwide portfolio of kids' channels, ABC Family and SOAPnet; as well as television production and syndication divisions ABC Studios, Walt Disney Television Animation, Buena Vista Worldwide Television and Walt Disney Television International. Disney-ABC Television Group also manages the Radio Disney Network in addition to the Company's equity interest in Lifetime Entertainment Services and A&E Television Networks.