• by Wayne Friedman , April 30, 2009

Looking to jump onto one fast-moving digital video train, Walt Disney will become an equity partner with NBC Universal/News Corp.'s quickly growing Hulu video destination site. News of this deal had been expected for weeks.

Disney -- which initially resisted joining the big site, which started in March 2007 -- has agreed to add its large library of TV shows from ABC, as well as programming from ABC Family, Disney Channel and SOAPnet.

NBC and News Corp. each have a 45% equity stake in the company; media investor Providence Equity Partners controls the remaining 10%. Disney was looking for an equal share with NBC and News Corp., resulting in a 30% stake for each. Financial terms and the structure of the deal were not disclosed as part of the announcement.

Hulu has been a rapidly growing site among big traditional TV advertisers due to its premium video content: top-flight streams of network TV shows. Estimates are that the site could grow to between $120 million and $150 million in advertising revenue this year -- drawing close to rivaling the ad coffers at digital video leader YouTube.

Still, media executives -- such as David Verklin, CEO of cable advertising effort Canoe Ventures, in speaking at MediaPost's Outfront conference this week -- wonder about the long-term business viability of the site. Essentially, it only sells four minutes of advertising per TV episode -- far less than traditional TV shows.

Shows from Walt Disney will include "Grey's Anatomy," "Dancing with the Stars," "Ugly Betty," "Private Practice," "Scrubs" on ABC prime time; "The View" and "General Hospital" on ABC daytime; syndication TV game "Who Wants To Be A Millionaire"; and "Greek" and "The Secret Life of the American Teenager" on ABC Family.

All will be streamed on an ad-supported basis.

With the addition of Disney, Hulu will have three major networks -- NBC, Fox and ABC -- as well as over 150 other content providers. Those providers include Comedy Central, Lionsgate, MGM, MTV Networks, National Geographic, Paramount, PBS, Sony Pictures Television, and Warner Bros. Television Group.

As expected, Disney will have three seats on the Hulu board held by Robert Iger, president/CEO of The Walt Disney Co.; Anne Sweeney, co-chair, Disney Media Networks and president, Disney/ABC Television Group; and Kevin Mayer, executive vice president, corporate strategy, business development and technology. All other current directors from News Corp., NBC Universal and Providence will remain on the Hulu board.