YouTube and Disney strike a deal

Wednesday 01 April 2009 | By Heidi Scott, Gosh! Media Copywriter

Walt Disney and YouTube have signed up to a business deal under which Disney will launch its own channels on the world's most popular video-sharing website.

Owned by Google since October 2006, YouTube has come under increasing pressure from the Mountain View giant to start converting its huge user numbers into real cash.

In the landmark deal, highlights from Disney's ESPN sports channel and clips from its TV shows will be available to watch on YouTube – which is keen to be seen as an outlet for high quality video – over the next couple of months. In return, Disney will have the right to put adverts in its output. In a statement, a spokesperson for Walt Disney said the deal offers, "The opportunity to reach a broader, online audience as well as extend the reach of our advertisers."

Google seems to have been dithering over the video advertising sector in recent months. After mentioning Google TV Ads Online, the company then pulled AdSense video units – described in Google's AdSense blog as "a new way to enrich your site with quality, relevant video content in an embedded, customizable player" – despite the growth in online video ad revenue. Now Google unveils its deal with Disney, which also covers teasers and recaps for popular sitcoms from its daughter company, ABC.

ClickZ reports that, as part of the forthcoming YouTube redesign, the current homepage tabs 'videos', 'channels' and 'community' will be replaced by tabs for 'shows', 'movies', 'music' and 'videos'. While the 'shows', 'movies' and 'music' tabs will display premium shows, clips and movies from Google's network and studio partners – which will feature in-stream advertising – the 'videos' channel will host the amateur and semi-professional content that major brand advertisers are wary of.

Could the gravitation toward pro content possibly indicate that YouTube is worried by the increasing popularity of Hulu.com, which features premium TV content and which currently takes silver medal in the video site popularity contest?

To add spice to the situation, Disney/ABC is rumoured to be in talks to purchase an equity stake in Hulu, which is jointly owned by News Corp and NBC Universal and which has enjoyed astounding growth in its first eighteen months. If such a deal were to come to fruition, entire ABC shows may well be available on Hulu, leaving YouTube on pause.

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