LOS ANGELES — With a string of recent deals, cable and satellite providers are beginning to acknowledge a brutal truth that companies like Hulu and Netflix have known all along: Many TV viewers, especially young ones, want shows and movies on their own terms — wherever, whenever and on whatever devices they choose.
Dish Network took a big step toward such a future with a deal announced Monday with Disney. The agreement opens the way for the satellite TV service to live-stream Disney-owned channels like ESPN and ABC over the Internet to customers’ smartphones, tablets, video game consoles and other devices.
The goal is to attract so-called cord-cutters who have become disenchanted with large channel packages and rising monthly bills for cable or satellite service.
Charlie Ergen, Dish Network Corp. chairman, hinted at the the deal last month, when he admitted that the traditional pay-TV business model — charging customers $80 or $100 a month for hundreds of channels, many of which they never watch — is not appealing to younger people.
“We’re losing a whole generation of individuals who aren’t going to buy into that model,” he told analysts. “Obviously you’d like to kind of have your cake and eat it too, and make sure that you come up with products that can engage that new generation.”
The new service will bypass Dish’s 14-million-customer satellite system and offer content via the Internet in the same way that Netflix delivers video.
No start date has been announced. Dish will probably have to cut similar deals with other programmers to make such a service attractive.
Dish would not discuss cost, except that it would probably be cheaper than current packages.
The deal is the first of its kind between a major pay TV distributor and a top media company. But the pair won’t be alone.
In January, Verizon Communications Inc. bought Intel Corp.’s media group with an eye toward an Internet-delivered TV service over mobile devices. Sony Corp. also said it would launch an Internet-based U.S. TV service this year.
“It’s hard not to see this as the beginning of the virtual (multichannel video service) that we’ve been waiting probably two years for,” said Rich Greenfield, an analyst with BTIG Research. He said that while 100-plus channel high-definition deals will still appeal to most TV consumers, an online-only TV service with mobile capability and lower price will appeal to others.
“I think it’s realizing that it isn’t a one-size-fits-all market for multichannel video,” he said.
Dave Shull, Dish’s chief commercial officer, said Dish’s offering will target people ages 18 to 34 who live in apartments, don’t have multiple TV sets and don’t need a traditional committment.
For Dish, that commitment usually means a two-year contract. Long-term contracts allow the company to make a profit while covering launching and maintaining satellites and installing dishes.
By delivering video over the Internet, Dish would probably contain costs.
The deal’s financial terms were not disclosed.
Dish CEO Joseph Clayton said in a statement the deal was “about predicting the future of television.”