The Walt Disney Co. has reached a deal to buy nearly a 30% stake in Hulu and will put full episodes of its ABC TV shows on the site, according to The Wall Street Journal.
The deal comes after a few months of discussion between Disney and the NBC Universal News Corp joint venture, and most early leaks pointed at a stake in Hulu being involved. Disney is reportedly going to invest capital and marketing funds roughly equal to what NBCU and News Corp originally put up – this most likely means Disney is in for $50 million.
The Journal says Disney will have a stake roughly the same size as NBCU and News Corp, and that Hulu employees and the equity firm Providence Equity Partners will continue to hold some shares.
This is great news for Hulu, which beat out Yahoo for the first time in March in terms of videos served, according to comScore’s numbers.
The offering from ABC will also be an advantage over YouTube, which recently gained a lot of TV episodes and movies but only has clips of ABC programming.
Hulu, available only in the US, has been picking up steam of late and is becoming a preferred destination for premium content – Sony recently dropped content from Joost and added it to Hulu. The service is keeping a tight grip on its revenue and advertising dollars, but getting Disney’s investment is a big sign that the company is doing quite well.
While the current agreement appears to be restricted to ABC content – likely to include the ABC cable network content and ABC Family Channel content – the possibilities for the service are breathtaking.
While Disney is likely using this as a testing ground – comparing Hulu’s full-length content success to the click-throughs it sees from clips on YouTube – a full embrace of the service could blow everyone away.
Together, News Corp, NBCU and Disney represent roughly 42 cable networks and 20 film studios. They include networks with some of the most popular TV shows in every genre and almost every time slot, along with studios that continually produce lucrative movies and movie series.
If these three companies put their full force and content behind the service, it could become the single destination for TV and film content on the Web.