Disney joins Hulu as equity partner

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Disney reversed course Thursday and jumped into Hulu, becoming a full-fledged equity-owning partner in the increasingly popular site for mainstream big-media video.

Disney has agreed to join NBC Universal, News Corp. and Providence Equity Partners in Hulu, which has seen its audience skyrocket to become the fourth-largest video Web site, reaching more than 41.6 million unique viewers as of March.

Once the deal is completed, programming from ABC, ABC Family and Disney Channel will become available for streaming on the site. All will be ad-supported.

Disney reportedly will invest about $100 million in capital and marketing dollars for a roughly 30% stake in Hulu, similar to the shares of NBC Uni and News Corp., according to the Wall Street Journal.

Until recently, Disney had resisted the increasingly popular strategy of spreading its content on the Internet. ABC in particular had insisted on delivering content through its proprietary video player at ABC.com.

But a few weeks ago, Disney inked a deal with YouTube, which has had to react to Hulu's popularity among users and advertisers by adding more professional content (though the number of full-length episodes available on the Google-owned site remains limited).

Mike Shields is senior editor at Mediaweek.
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