Disney-Hulu Deal is Ominous for YouTube

Hugh Pickens writes: "Dow Jones reports that Hulu scored a big victory when Disney agreed to take a nearly 30% stake in Hulu and put full episodes of its ABC TV shows on the site, enabling users to see shows like Lost, Scrubs, Ugly Betty and Desperate Housewives for free. Disney views the move as a way to reach a new audience that isn't coming to the network's own website. Although the ABC.com website has attracted regular viewers of its shows, Hulu offers the opportunity to tap into a new group of viewers. Now Google is under mounting pressure to add more professional content to YouTube in order to attract more advertisers. According to Dow Jones' Scott Morrisson the equity structure of the Disney-Hulu deal suggests that content creators want greater involvement in online distribution than Google has offered with YouTube. "Content providers don't want to give (YouTube) content because the advertisers aren't there yet," said Edward Jones analyst Andy Miedler. The Wall Street Journal reported that It wasn't immediately clear why Disney opted for Hulu, but a person familiar with the situation said Google and Disney had also been in talks to put long-form content on YouTube and noted that Google was not be willing to offer any content provider an equity stake in YouTube. "I don't think (YouTube) can get into the premium space with revenue-share only," says Forrester Research analyst Bobby Tulsiani. "They are going to have to make upfront payments or equity deals.""