Disney is close to signing a deal that would bring its content to Hulu.
There’s one big hold-up, however.
Disney is also close to signing a deal that would bring its content to Google video site YouTube, PaidContent reports.
Here’s how the Disney-Hulu deal looks:
- The deal would make Disney an equal partner with News Corp. and NBC Universal in their joint venture, Web TV site Hulu.
- Each of would own 30% of the company with Providence Equitiy Partners hanging on to 10%.
- Disney would commit to marketing the service.
And the Hulu-YouTube details:
- There are two deals.
- One would put ESPN, ABC and other Disney clips on YouTube. Disney would sell the ads.
- The other, bigger deal would bring full ABC episodes to YouTube in a pricey “pay-for-play” arrangement. (“Pay-for-play,” is the same desperate measure Google pulled to get the music labels signed back in 2006/2007. It’s expensive and unsustainable, which is why Google wants out of those deals now.)
- YouTube is creating a special, soon-to-be launched premium content channel to entice these kinds of deals.
- Talks with Google about the second deal are early stage.
In choosing between Hulu and YouTube, Disney is deciding between long term and short term gain. YouTube has more reach than Hulu right now, but Hulu offers Disney a chance to own the place where its content comes online.
What we’re watching for is how desperately Google throws itself at Disney. Since acquiring YouTube for $1.65 billion in 2006, Google’s had little success making much money at all from the site. Adding premium content it can serve premium ads against is seen by many inside Google to be YouTube’s last best hope.
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