- Mike Shields, Mediaweek

NEW YORK Speculation has been mounting of late that Disney and its corporate sibling ABC would begin distributing programming on the increasingly popular video hub Hulu. In a surprise turn of events, Disney has agreed to become a full-fledged, equity-owning partner in the site.

Walt Disney Co. said today that it has agreed to join NBC Universal, News Corp. and Providence Equity Partners as partners in Hulu, which has seen its audience skyrocket to become the fourth-largest video site on the Web, reaching more than 41.6 million unique viewers as of March. Once the deal is completed, programming from ABC (Lost, Grey's Anatomy, Desperate Housewives, ABC Family and the Disney Channel will become available for streaming on the site.

Disney's move is set to shake up the fast-growing online video industry. Until recently, the company had resisted the increasingly popular strategy of spreading its content all over the Internet. ABC in particular had insisted upon delivering its series through its own proprietary video player.

But just a few weeks ago, the company inked a deal with YouTube, which itself has had to react to Hulu's popularity with users and advertisers by adding more professional content (though the number of full-length episodes available on the Google-owned site is still limited). The Hulu deal appears to mark a shift in philosophy for ABC.

"Disney and Hulu share a focus on delivering the highest-quality entertainment experience and we look forward to working with Hulu to build value for our consumers, our brands and our shareholders," said Robert A. Iger, president and CEO of Disney.

Plus, from Hulu's perspective, the two-year-old company is now close to locking up the market on premium online video content. The pressure will soon mount on lone broadcast holdouts CBS and the CW, which have thus far resisted the joint venture.

"Hulu, quite simply, now has the best premium content on the Web," said News Corp. president and COO Peter Chernin. "With three major networks and over 150 leading content providers providing content, combined with the best video user interface anywhere on the Web, Hulu offers consumers the finest premium online video experience available today."

Other Disney series soon to be making their way to Hulu include the ABC primetime shows Private Practice, Ugly Betty and Scrubs, the ABC Family shows Greek, and The Secret Life of the American Teenager, as well as daytime series like Who Wants To Be A Millionaire, General Hospital and The View. All will be ad supported.

Source: Mediaweek.com