Walt Disney Co., seeking to broaden the audience for its broadcast and cable shows on the Internet’s most popular video site, struck a deal Monday with Google Inc.’s YouTube to distribute short-form content from ESPN and ABC.
The agreement would extend the Internet reach for ESPN’s sports highlights and ABC News updates and provide another outlet for video snippets taken from the ABC broadcast network and ABC Family cable channel shows. Disney hopes the arrangement will bring its advertisers to YouTube, a site that has 100 million monthly visitors but has had difficulty making money off “user-generated content.” Disney would keep the majority of the proceeds, YouTube said.
“Google has been trying for a long time to figure out how to get advertising into YouTube,” said Debra Aho Williamson, a senior analyst with eMarketer, an Internet market researcher. “It’s got so many users, but where’s advertising? It’s obviously been frustrating for Google.” Providing a dedicated channel on YouTube where familiar names such as ESPN or ABC can be watched might allay advertiser concerns that their brands and products would end up adjacent to unsavory content.
But securing high-production-value content isn’t a guarantee that advertisers will follow, as YouTube’s licensing dispute with Warner Music Group has shown. Warner pulled its music videos from the site in January, protesting that the videos weren’t generating sufficient revenue from advertisers to justify the arrangement.
Disney is supplying YouTube only with “short-form” programming, not full-length episodes or movies, making the content largely promotional in nature — a move that will be a boon to ABC but one that may not attract advertisers.
The YouTube deal further signals a shift in ABC’s Web strategy, which had focused on drawing viewers to the network’s own site and those of its TV affiliates. Disney appears to have decided that it needs to strike partnerships with other sites to provide broader distribution for its shows. The company is also in discussions to take an equity stake in Hulu.com, the fast-growing online video site owned by its network rivals, NBC Universal and News Corp., in exchange for providing program-length content.
Nonetheless, the deal for short-form programming between Disney and YouTube may be a prelude to more substantial content.
Source: Los Angeles Times