Los Angeles, May 1: With Walt Disney Co (NYSE: DIS) acquiring a 27 percent stake in the popular video site Hulu.com, Disney movies and ABC TV shows will be available on the internet. With this acquisition, Disney joins NBC Universal, News Corp (NASDAQ: NWSA, ASX: NWS, LSE: NCRA) and Providence Equity Partners as investors in the Los Angeles, California based Hulu.
In an attempt to reach a larger number of audiences, the Walt Disney company acquired a 27 percent stake in Hulu.com
Anne Sweeney, president of the Disney-ABC Television Group gave the logic behind the $35 million investment in Hulu, “We are trying to make our shows as accessible as possible. We saw growth in casual viewers that we hadn’t tapped and that Hulu had tapped. There is room to expand an audience that wasn’t already coming to ABC.com.”
As on date, Hulu is a joint venture of NBC Universal (GE) and Fox Entertainment Group (News Corp). The Providence Equity Partners have made an equity investment of $100 million and hold a 10 percent stake in Hulu. With Disney’s entry, three of the four big broadcast networks own stakes in the streaming video site.
As per the terms of the deal, Hulu will get an exclusive license from ABC to distribute the latter’s shows across the Web on Hulu as well as its partner sites like MySpace and AOL.com. ABC will also shell out close to $25 million in marketing credit to be used by Hulu to advertise itself during ABC’s broadcast shows. In return, Disney will get three seats on the 12-member board.
About Hulu
Founded in 2007, Hulu has gained from strength to strength and is amongst the most well-liked online video destinations. Although it is still no competition to the behemoth YouTube, it ranks among the top three online video sites in the United States.
Market research firm comScore reported that the number of videos viewed in March 2009 were up by close to 15 percent vis-à-vis videos viewed in February 2009.
Everything seems hunky dory for Hulu at the moment. However, Google Inc.'s (NASDAQ:GOOG, LSE: GGEA) YouTube will have to think on its feet and change its revenue-sharing business model in order to retain the numero uno position in the online video industry.
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