Disney Takes 27% Stake in Hulu, to Air Shows at Site

Top Quote Walt Disney Co. is acquiring a stake in the, gaining a new Internet outlet for films and television shows on the third most popular video Web site. End Quote
  • (1888PressRelease) May 01, 2009 - Disney joins NBC Universal, News Corp. and Providence Equity Partners as investors, the Burbank, California-based company said today in a statement. Disney will get a 27 percent stake, near parity with NBC and News Corp., and will invest less than $35 million, said a person with knowledge of the plans who declined to be identified because the terms aren’t public., which already runs prime-time TV shows from Fox and NBC, is gaining popularity and became the third most-watched Internet video site in March, according to researcher ComScore Inc. Broadcasters are looking for new outlets for programs in the face of falling advertising sales and the loss of viewers to the Internet.

    “We are trying to make our shows as accessible as possible,” Anne Sweeney, president of the Disney-ABC Television Group, said in an interview. “We saw growth in casual viewers that we hadn’t tapped and that Hulu had tapped. There is room to expand an audience that wasn’t already coming to”

    Sweeney declined to discuss terms of the accord. Hulu spokeswoman Christina Lee and News Corp. spokeswoman Julie Henderson also wouldn’t comment. Cory Shields, a spokesman for General Electric Co.’s NBC Universal, didn’t immediately respond to a request for comment.

    Board Seats

    Disney rose 89 cents to $21.90 at 4:15 p.m. in New York Stock Exchange composite trading and has declined 3.5 percent this year. GE gained 43 cents to $12.65. News Corp. Class A shares added 11 cents to $8.26 on the Nasdaq Stock Market.

    Disney will gain three seats on Hulu’s board to be held by Chief Executive Officer Robert Iger, Sweeney and Kevin Mayer, executive vice president of corporate Strategy. Current directors from News Corp., NBC Universal and Providence will remain.

    Disney and its ABC unit plan to provide current and older programs, including “Scrubs,” “Private Practice” and the late night talk show “Jimmy Kimmel Live.” Hulu will also carry fare from the ABC Family and SOAPnet channels and older feature films from Walt Disney Studios.

    Disney research shows ABC viewers watch only seven to eight episodes of their favorite shows during the television season, missing the majority, Sweeney said.

    Attracting Ads

    “Traditional media companies have an opportunity to attract quality advertisers to the Web,” News Corp. President Peter Chernin said yesterday at the Milken Institute Global Conference in Beverly Hills, California. “People don’t want to watch reruns on TV.”

    Google Inc.’s YouTube, the most-watched Internet video site, is adding clips of programs from ABC and Disney’s ESPN sports cable channel, as well as films from Sony Corp. to attract more viewers. Free full-length episodes of ABC prime- time shows will only be available at and

    Hulu will work with Disney as it has with News Corp. and NBC Universal, Chief Executive Officer Jason Kilar said today in an interview. The company monitors what viewers search for and asks to add programs, he said.

    ABC will supply roughly the same amount of prime-time shows as NBC and Fox, Kilar said. The addition will also help Hulu and Disney attract advertisers, he said.

    “We aspire to create a service that is appealing to the widest number of advertisers with content that reaches across all demographics,” Kilar said.

    Welcome CBS

    The addition of Disney leaves CBS as the only major network without shows on Hulu.

    CBS Corp., the only major broadcast network to add viewers this season, is making programs available on the Internet on a non-exclusive basis, spokesman Dana McClintock said today in an e-mail. YouTube and the company’s own carry full episodes of CBS shows.

    “We continue to discuss similar arrangements with additional partners,” McClintock said. “The company also believes that controlling our own rights for that content -- in all media -- preserves its value in a multiplatform business.”

    Hulu would welcome CBS, Kilar said.

    “It’s ultimately their decision,” Kilar said. “We think we could bring a lot of value to CBS and their shareholders.”

    At an April 22 conference in San Francisco, Kilar said Hulu plans to add more content this year than in 2008.

    Both Hulu and YouTube are in talks with the four biggest record labels to add music videos, people familiar with the discussions told Bloomberg last week.

  • FB Icon Twitter Icon In-Icon
Contact Information