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Disney+ Nears Distribution Deal With Sky – Report

Comcast-owned Sky is close to striking a deal to distribute Disney+, the new OTT-delivered subscription VoD service from the Walt Disney Co., The Telegraph reported.

UK-based Sky and Disney were "putting the final touches to a multi-year partnership" over the weekend, the report added. Sky declined to comment on the report. Disney has been asked for comment.

Word of a possible Sky/Disney+ linkup comes the week after Sky notched a deal to integrate Netflix into SkyQ, a flagship video platform that ties together traditional live TV, VoD and OTT apps and services. On last week's Q4 earnings call, Comcast noted that it's making it a priority to broaden the rollout of SkyQ, which ended 2019 with a penetration rate of 42%, up from 29% at the end of 2018.

Why this matters
A formal distribution and integration deal with Sky will provide additional exposure and marketing power for Disney+ as it prepares to launch in the UK and other western European countries on March 24. Under its standalone OTT model, Disney+, which features content from the company's Star Wars, Pixar, Marvel and National Geographic franchises, will sell in the UK for £5.99 ($7.83) per month and £59.99 ($78.37) per year.

Word of an imminent Sky/Disney+ distribution pact is a further indication that Disney intends to work the pay-TV angle alongside its strategy to sell the service directly to consumers. While a deal with Sky could mean that Disney+ is also pursuing a similar agreement with Comcast for distribution of the OTT service in the US, Disney's recent programming carriage deal with Charter Communications sets forth the potential for Charter to offer a trio of Disney's subscription streaming services -- Disney+, Hulu and ESPN+.

A Sky deal could also put pressure on other UK-based service providers, including BT and Liberty Global's Virgin Media, to strike similar arrangements with Disney.

Thanks in part to a wave of early sign-ups and promotional tie-ins, Disney+ had about 10 million subscribers when it launched on November 12, 2019. Disney will announce updated Disney+ sub numbers when the company reports fiscal Q1 2020 results on February 4.

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— Jeff Baumgartner, Senior Editor, Light Reading

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