AP Business Writer
BURBANK, Calif. (AP) -- Disney faces one of the first big tests of its WatchABC app on Monday, as customers who had enjoyed free live viewing of local ABC stations in New York and Philadelphia on mobile devices will now need to show they are pay TV subscribers.
The app also launches Monday in four new markets, where use will likewise be limited to pay TV subscribers: Los Angeles, Chicago, San Francisco and Raleigh-Durham, N.C.
Since the middle of May, anyone who downloaded the app in New York and Philadelphia could catch live local broadcasts from Disney-owned ABC stations WABC and WPVI on iPhones, iPads and Kindle Fires.
Now they'll have to enter the username and passwords they use to access online tools from their cable TV provider. Participating providers are Comcast, Cablevision, Cox, Charter, Midcontinent and AT&T.
Customers who don't have a pay TV subscription or get service from a different provider will not be able to watch live programs on the app. Previously aired full episodes will still be available for free on demand over mobile devices.
WatchABC is part of the TV industry's "TV Everywhere" initiative, which is meant to increase the value of a pay TV subscription by giving viewers access to their favorite TV shows anytime and on multiple mobile devices. But executives have acknowledged it is taking a long time to become a reality, partly because rights deals haven't been completed.
WatchABC now has live mobile viewing available for just six of about 200 TV stations that carry ABC, although the latest rollout includes its biggest markets. Two more stations owned by Disney in Houston and Fresno, Calif., will offer live viewing through WatchABC by September. Another 13 stations owned by Hearst Corp. plan to offer live viewing the app in the coming months.
Complicating the issue, The Walt Disney Co.'s arrangements with local ABC affiliate TV stations and pay TV operators currently cover just over a third of the approximately 100 million people who pay for TV nationwide. So some people living in the covered markets will not be able to watch live programming on the app, because their provider has not reached a deal with the local ABC affiliate for the service.
Albert Cheng, chief product officer for digital media for Disney/ABC, says the rollout is similar to how the wireless phone industry gradually brought faster "4G LTE" service to different cities over time.
"It is as confusing as that -- when is my market going to happen?" he said. "The markets will be lit up as these agreements come into place, not too different than it takes time for cell carriers to put up new towers."
There are plans to possibly make the on-demand portion of WatchABC also limited to pay TV customers in the future, Cheng said, but the service would have to be more widely available to justify the loss in advertising revenue that would occur when non-pay TV users lose access.
ABC is the first broadcast network to try live streaming its programming over an app. Some pay TV networks like ESPN have been streaming live programming for some time.
WatchABC's expansion comes as upstart Aereo attempts to capture a slice of the mobile viewing audience with its $8-a-month service that started in New York last year and expanded to Boston and Atlanta this spring. Aereo plans to offer service -- which includes live streams of major local TV stations -- in Chicago in September.
Broadcasters have sued Aereo for copyright infringement, but so far Aereo has won court rulings that have kept it in business.
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