How Apple’s iPod deal with Disney rocked TV’s world

“In the summer of 2005, Apple Computer CEO Steve Jobs came to Disney-ABC Television Group President Anne Sweeney’s Burbank office to show her a new device that he claimed would revolutionize the television industry,” James Hibberd reports for TV Week.

“The device was a beta model of the video iPod, and Mr. Jobs had pre-loaded the player with an episode of ‘Lost,’ according to Ms. Sweeney, who also serves as co-chair of Disney Media Networks. For a few hours, Mr. Jobs walked her through the features of the device and explained how shows could be promoted and sold on iTunes, just like music.
As Mr. Jobs demonstrated the iPod playing her hit show, Ms. Sweeney had a ‘Lost’-style flashback of her own-to a staff meeting the morning after the first-season finale of ‘Desperate Housewives,'” Hibberd reports.

“The mood at the ABC meeting was euphoric. After a multiyear ratings slump, the network rebounded with two breakout hits-‘Lost’ and ‘Desperate Housewives’-that gained both critical acclaim and chart-topping Nielsens,” Hibberd reports.

Hibberd reports, “Then Vince Roberts, head of operations and engineering for the ABC cable networks group, played a DVD for the staff. It was the ‘Housewives’ finale, with great picture quality and no commercials. Mr. Roberts said he downloaded it for free off the Internet an hour after the finale premiered. ‘At that moment we realized that it’s one thing to look at our competitors; it’s another to look out there and realize there’s a competitor you can’t see, and that’s piracy,’ Ms. Sweeney said.”

“Looking at the video iPod Mr. Jobs gave her, Ms. Sweeney knew she didn’t face a choice of whether to makes episodes available online, but a choice of whether to try to monetize online distribution of ABC content,” Hibberd reports.

“Assembling the deal that Mr. Jobs and Ms. Sweeney’s boss, Walt Disney Co. CEO Robert Iger, ultimately announced in October 2005 was tricky. Due to Apple’s secretive development process, Ms. Sweeney was allowed to involve only a handful of people. Everyone signed nondisclosure agreements,” Hibberd reports. “At the time, the secrecy seemed merely an annoyance. But after the announcement, angry reactions by station owners and advertisers left out of the loop gave the Disney-iTunes deal a worrisome spin.”

Full article here.

MacDailyNews Webmaster’s Note: An interesting article made all-the-more interesting to me as I grew up around the corner from Anne Sweeney – literally one street over in Kingston, NY – although she was graduating high school right around the time I was finishing up second grade with one of my favorite teachers: Mrs. Sweeney. Yup, Anne’s mom was my second grade teacher. That I routinely cover Sweeney in relation to Apple for MacDailyNews is just another proof that It’s a Small World After All.

MacDailyNews Note: Named the “Most Powerful Woman in Entertainment” by The Hollywood Reporter, one of the “50 Most Powerful Women in Business” by Fortune and one of “The World’s 100 Most Powerful Women” by Forbes, Anne Sweeney serves as co-chair of Disney Media Networks and president, Disney-ABC Television Group. More in her Disney bio here. Anne Sweeney tells “How She Got There” in a Newsweek article from Nov. 2005 here.