Thursday, April 30, 2009

Disney Grabs a Piece of Hulu

Now with succulent Add On.

The Mouse House becomes a bigger player in the on-line distribution game:

Walt Disney Co.'s deal to put ABC TV shows on Internet video site Hulu suggests Google Inc.'s YouTube may have to rethink its revenue-sharing business model.

Google is under increasing pressure to add more premium content to YouTube in order to attract advertisers - and revenue - from the site. But on Thursday, rival 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.

With the deal, Hulu will be able to distribute content from three of the top four U.S. television broadcasters, giving it a commanding lead in the online premium content market.

But the big question is, how will this impact Hollywood labor's residual deals with the majors?

SAG, DGA, AFTRA, WGA and IATSE all have "new media" participation percentages with the entertainment conglomerates, but how much cannibalizing is going to take place between one distribution platform and another? How big (or small) are the resulting payments going to be?

I've got no clear answers, but answers will be coming during the next few years, and they will possibly not be to everyone's liking ... Like for instance, SAG. There were picketers out in front of the Screen Actors Build building today, protesting the final deal, so ratification of a new contract and new media agreemnt are not ncecessarily foregone conclusions.

Maybe we're fulfilling the Chinese curse by living in interesting times.

Add On: ZD Net thinkks Apple might have a wee bit of a problem with Disney's Hulu deal. (And we know who DizCo.'s largest stockholder is, don't we?) ...

... [T]hat Disney will invest in video streaming site Hulu sent shockwaves through the video industry and turned the spotlight on Hulu competitors YouTube and CBS. CBS and it’s fledgling is the only remaining major TV network not part of the Hulu clique – NBC, Fox and now ABC.

The other major company that could feel some aftershocks from the Disney-Hulu deal is Apple. Business Week’s Cliff Edwards points out that Apple neither creates video content nor does it distribute it for free online. Both of course, are core features of Hulu.

The threat is that Hulu is streaming free (albeit with ads) what Apple is try to sell and rent ...


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