Disney and ABC Coming to Hulu?

Discussions between popular Internet TV site Hulu and media monolith Disney have been described as “serious.” The two parties have been in discussions that could, ultimately, bring ABC and, though less likely for cable provider licensing reasons, ESPN content online. Disney has reportedly offered the content in exchange for 10% of Hulu. As an estimate of value, investor Providence Equity paid $100 million for 10% of Hulu. Hulu’s primary owners NBC and Fox each own 45% of the site.



With competing sites like TV.com, whose site traffic grew substantially in the first quarter, leveling the playing field and causing Internet TV sites to tighten up content distribution agreements between various networks, a deal with Disney could give Hulu the edge it needs to stay ahead.

There is one snag, however: the partially-exclusive online distribution of Fox and NBC content expires after 2 years. If Disney and Hulu do come to an agreement, Hulu’s stronghold could be loosened by either Fox or NBC distributing their content with another site, or even launching another of their own.

There are still few details, pending an agreement, when and how the Disney-owned content would be distributed through Hulu. But, given the looming question of renewal between Fox and NBC and the increasingly competitive and rapidly changing nature of the Internet TV market, what looks like a breakthrough now, could be a blunder a year from now.

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