Disney buys into online video with Hulu stake
Fans of Disney and ABC television programs such as Lost and Grey’s Anatomy can rejoice now that full movies and episodes will be available on Hulu’s online video site. This comes as Disney buys a stake in Hulu along with NBC and News Corp.
Along with a 27 percent stake in Hulu, Disney will receive a share of revenue from ads streamed to viewers of Disney and ABC content. While the terms aren’t public, the investment is rumored to be worth as much as $35 million.
The partnership with Disney forms a pact between three of the four major television networks. Disney owns ABC, News Corp owns Fox and NBC Universal represents the third major partner in the online video venture.
The only major network left out of the pact is CBS, which acquired TV.com along with the purchase of CNET Networks. While this means that viewers can access programming from all four networks online, it means that Hulu now has the upper hand against TV.com.
Hulu has risen to the number four online video destination since its launch last March. While YouTube still holds a strong lead in the space, Hulu is more advertiser-friendly as the content is generally more family-friendly.
Disney already had a partnership with YouTube to provide short form programming from ESPN and ABC. Since YouTube is working to launch more long form content, Disney’s choice to go with Hulu may decide the winner in long form content on the Web.
Even so, YouTube’s free advertising-based online video has created enormous pressure on the television networks to get online. The networks then followed YouTube’s model in giving away content in return for advertising dollars in order to compete.
Whether YouTube, Hulu or TV.com comes out on top of the online video space, the competition has opened up tons of premium programming to consumers at no cost. No matter which site takes the lead in the long term, it’s the viewers that win.
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May 4th, 2009
Hallelujah it’s about time.