Disney Buys Into Hulu. YouTube Should Worry!

Written by Igor Beuker on May 2nd, 2009 | 3 comments

During a taxi ride through NYC I saw at NBC news that Los Angeles based Hulu, the #3 video site in the US, just got major buy-in from Disney. Earlier major media companies News Corp and NBC took a stake of 27 percent in Hulu.

As the initial exclusivity for NBC and Fox content expires, Hulu will be adding Disney/ABC videos and TV shows to its distribution mix as well.

Hulu is becoming the preferred distribution channel for the big media companies. And it is succeeding in attracting the fickle Web audience. Hulu might soon become the #2 video site in the US. Read more about Hulu at Wikipedia.

This should worry YouTube, which is still casting about for a business model that will pay for its enormous storage and bandwidth costs. The media companies cannot ignore YouTube just yet, but by strengthening Hulu they can give it their best content first.

In the world of media companies, every new distribution window is a new opportunity to make money. So instead of thinking of the Web as one big distribution window, maybe Hulu gets first dibs at the hottest shows and movies, and then YouTube after a while.

The media companies would like nothing better than to displace YouTube as the king of all Web video. And with a stake in Hulu’s success, they have even more incentive to help it win.

But if Hulu does become the de facto distribution vehicle for the media companies, the TV and movie companies who are not part of the partnership will be at a disadvantage.

Companies like CBS and Time Warner have to consider joining as well. But Hulu can’t let them all in because at a certain point it will trigger antitrust concerns. So there is a limit to how dominant Hulu can become, but Hulu is still along way from getting there (Hulu streamed an estimated 380 million videos in March in the U.S., compared to 5.9 billion for YouTube).

For now, merely presenting a serious challenge to YouTube is a good thing for competition and for video on the Web.

Source: TechCrunch

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3 Comments

• mark says:

  May 2, 2009 at 08:42

  Hi Igor,

  Interesting post and I agree with your statement.

  I am curious if YouTube thinks the same about your post.

  Look what they say in The Netherlands http://www.frankwatching.com/archive/2009/04/28/mascha-driessen-als-youtube-een-land-was/

  Bye.

  Reply
• Igor Beuker says:

  May 3, 2009 at 01:08

  Hi Mark

  Thanks. Interesting item you refer to. Read it with pleasure.

  I like YouTube a lot, but comparing it with a country is a few steps to far for me.

  Let me explain shortly: I can imagine people compare eBay with a country: it has an economy, trading and sales.

  That still needs to be proven by YouTube, since it has plenty of eyeballs but lacks significant revenues.

  And if “display” advertising will bring the solution within a video sharing site or video social network, we’ll have to see….

  I’m not to sure about display ads and pre-rolls commercials within social environments within social sites. Might be a bit too intrusive within coversational marketing spaces?

  Cheers

  Igor

  Reply
• Aún hay más #2 | Algo que hacer. Innovación en Marketing y comunicación digital says:

  May 8, 2009 at 12:24

  [...] – NEWS – ] # Disney participa en Hulu Hulu se convierte en la plataforma oficial de los contenidos de Disney, la única en la que se [...]

  Reply