Disney has listened to its local affiliates and found a way to compromise on internet video:

Local ads now appear only when viewers access the player from a local affiliate’s Web site, but by next fall, the ABC.com site will seamlessly redirect users to their home markets, said Ray Cole, chairman of the ABC Affiliate Relations Board of Governors.

Cole said that, in addition to local ad participation, affiliates had wanted future broadband players to preserve each station’s designated market area for advertising.

“We are working through the technical challenges, but we are satisfied the network is sensitive to those issues and working on them,” Cole said on Wednesday.

Affiliates have agreed to promote the player software online and on air, and the ABC Affiliate Board has endorsed the program, Cole said.

Episodes now will contain up to four interactive ads rather then the test’s three spots. Up to three of the ads will feature a single national advertiser and one ad will be local.

If you hear a faint cackling in the background, that is the BBB staff laughing. The entire point of the internet is to render geography obsolete. Any attempts to introduce a “locality” to content always creates problems (both social and technological).