Get Desperately Lost for Free

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Disney's (NYSE: DIS) ABC is at it again. The same network that pioneered selling TV-show downloads online -- after hooking up with Apple Computer (Nasdaq: AAPL) last year to sell episodes of hit shows like Lost and Desperate Housewives at $1.99 a pop -- is now poised to start streaming its shows online.

According to this morning's Wall Street Journal, the family entertainment giant will offer free, ad-supported streams of its hit ABC shows later this month. The shows, available the day after they first air on TV, will feature fresh ads that viewers won't be able to skip. Disney plans to roll out similar offerings for its Soapnet, ABC Family, and Disney Channel offerings.

It's a delicate balance. Network affiliates may not have been bothered by DVD sales of television shows after each season ended, but most stations were bothered when Disney and ABC teamed up to sell iPod-ready downloads. Unless Disney plans to split ad proceeds with its affiliates, this is likely to irk them further.

The move has pitfalls for Disney as well; Disney has to make sure that the streaming shows don't detract from its primetime ratings, DVD sales, and premium downloads.

ABC has already dipped a toe into the broadband-friendly ad-supported model. Its site for Lost features photo galleries that are available only after Internet users agree to stream an ad by Honda (NYSE: HMC).

True to its trendsetter ways, Disney is likely to be aped by the competition. After all, General Electric's (NYSE: GE) NBC and CBS (NYSE: CBS) followed Disney into selling digitally distributed rebroadcasts last fall.

These are definitely interesting times. Moves like these may ultimately ignite the media-center computing market that marries PCs and TVs. Even as Apple has saved the music and filmed-entertainment industries, Disney may become the best friend of a somewhat stagnant desktop market.

At the very least, the move may inspire even more TV advertisers to embrace digital streaming.

Longtime Fool contributor Rick Munarriz can certainly use Disney's new service, since he failed to record last week's episode of Lost. He owns shares of Disney.The Fool has a disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.