Contentinople - Ryan Lawler - News Bits: Disney Flirts With Hulu, YouTube

Written by Ryan Lawler

Monday, March 30. 2009 at 11:30 AM EDT Post a comment

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Walt Disney Co. (NYSE: DIS) may be looking to strike a deal with Hulu LLC or YouTube Inc. that would put its video content on their video portals, according to reports.

Discussions between Disney and Hulu have gotten serious, and center around Disney putting its video content on the Hulu Website and taking an equity stake in the NBC Universal and News Corp. (NYSE: NWS) joint venture, according to paidContent.org.

Under the terms of the deal currently being discussed, the content partners would evenly split their equity shares in Hulu, with each taking a 30 percent stake. Meanwhile, investor Providence Equity Partners would retain its 10 percent stake in Hulu.

Full-length video and clips from ABC Inc. would be at the center of the deal, but Disney could also provide videos from ESPN Internet Ventures , the Disney Channel, and other properties.

At the same time that it has been dancing with Hulu, Disney has also been in discussions with Google (Nasdaq: GOOG)'s YouTube for a deal that could bring clips, and possible even full-length videos, to that video site. according to paidContent.org.

The question is why Disney feels the need to extend its distribution through a deal with either company. Disney has done pretty well for itself without being embedded on Hulu or YouTube. ABC.com, for instance, has nine of the top 10 television shows online, according to some metrics, and ABC digital chief Albert Cheng says the site is profitable. So why mess with a good thing?

In other news:

Skype Ltd. is rolling out an application for Apple Inc. (Nasdaq: AAPL)'s iPhone and iPod Touch that will allow device owners to talk with other users of the service for free, according to The New York Times. The app will be limited in some ways: It will only work when users are connected via WiFi networks, for instance. No word yet on how much it may cannibalize actual minutes used on AT&T Inc. (NYSE: T)'s mobile network.

Also from The New York Times: Google will soon be offering free music downloads in China, as part of a pact with major music companies. The search giant has teamed up with Sony BMG , Universal Music Group , and Warner Music in a deal that will allow it to provide links to legal downloads of music, in Google's effort to raise its visibility in the Chinese market. The move is Google's way of positioning itself better against Chinese search leader Baidu, which has angered some music firms by providing links to illegal file downloads.