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Disney Takes Equity Stake in Hulu, Offers Content

30 Apr, 2009 By: Erik Gruenwedel

High-flying Hulu.com, the repurposed TV content streaming site co-owned by NBC Universal and News Corp., April 30 said The Walt Disney Co. had signed on as a joint venture partner and equity owner.

Financial terms of the deal, finalized through a subsidiary of ABC Enterprises, were not disclosed.

Full-length episodes of current and library programs to be streamed on Hulu — on an ad-supported basis — include “Lost”, “Grey's Anatomy,” “Desperate Housewives,” “Private Practice,” “Ugly Betty,” “Scrubs,” “Greek,” “Hope and Faith,” “Less Than Perfect,” “Wizards of Waverly Place,” “Phineas and Ferb,” “Who Wants to Be a Millionaire,” “General Hospital,” “The View” and “The Secret Life of the American Teenager.”

“Hulu, quite simply, now has the best premium content on the Web,” said Peter Chernin, outgoing president and COO of News Corp.

Disney’s move amounts to a major coup for Hulu, which not only enhances its lineup with primetime ABC TV programming previously available on iTunes, but also establishes the site as the online destination for streaming content.

Hulu for the first time cracked the top three in the rankings of videos watched in March, according to comScore.
CEO Jason Kilar said the cultural fit and similar focuses between Hulu and Disney regarding electronic distribution portend good things for advertisers and content partners.

“We are smiling big today because we are honored to be working with a company that quite frankly inspired us from the very start of Hulu,” Kilar said in a blog post.

Richard Doherty, director of The Envisioneering Group, said the addition of Disney could push Hulu’s revenues beyond incremental.

“Hulu is making money,” Doherty said. “[Jeff Zucker, CEO of NBC Universal] is quoted as saying the site is turning analog dollars into digital pennies. Now it is up to digital dimes.”

This leaves just CBS with TV.com as the sole holdout of 50% of America’s top-rated prime-time TV content not available on Hulu.

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