Disney Buys Into Hulu

huluCount Disney in. It's official: The Walt Disney Co. is joining NBC Universal, News Corp. and Providence Equity Partners as a joint venture partner and equity owner of the popular online video aggregator Hulu.

The agreement is still subject to regulatory review, but once it closes Disney will have three seats on the Hulu board, held by Bob Iger, president and CEO or the Walt Disney Co.; Anne Sweeney, president Disney/ABC Television Group; and Kevin Mayer, Disney/ABC executive vice president, corporate strategy, business development and technology. (The companies won't disclose the financial terms of the deal.)

The partnership will, of course, put a few more big guns in Hulu's holster, bringinig popular ABC and Disney programs to the service, stocking Hulu with episodes of prime-time hits such as Lost, Grey's Anatomy, Desperate Housewives and Ugly Betty as well as giving it SOAPnet, Disney Channel and ABC Family content.

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When OMMA asked Albert Cheng, Disney/ABC executive vice president of digital media, this February if the company's monetization strategy precluded it from an alliance with Hulu, Cheng responded: "We have no problem with the product, which is great. The business processes, and the way we monetize our content, is usually what makes it difficult. Hulu has a very specific online format and purpose. We look at our network more broadly, which is ABC brands across multiple platforms -- not only online but TV, our own and our partner's networks."

Consider Disney and Hulu partners.

But this is a partnership that could be good for everyone (except maybe CBS at this at this point). Bill Day, CEO of video ad network ScanScout, says: "The more quality content like Disney's gets syndicated, the more consumer adoption will increase, increasing the reach of online video further. It also helps attract even more ad dollars into the ecosystem because traditionally this type of content has attracted large brand advertisers that are very familiar with it and are willing to put ad dollars against."

The move shows how quickly the online video model is shifting. Benjamin Wayne, CEO of plug-and-play video solution Fliqz and an outspoken critic of YouTube's UG model, says: "Disney's equity participation in Hulu both validates the importance of the online medium as a distribution channel for traditional brands and underscores Hulu's success in aggregating a loyal and monetizeable audience for video content. Content creators are ever more eager for opportunities to create revenue from their existing film libraries, and Hulu has proven itself an innovative and visionary pioneer in making this a reality."

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