Disney Joins Hulu | Takes Ownership Stakes

Walt Disney Co has reached a deal to become a partner in the popular video website Hulu founded by NBC Universal and News Corp.

Disney’s much-anticipated entrance, after a long period of talks between the companies, will add full-length episodes of TV shows from its ABC broadcast network like “Lost,” “Grey’s Anatomy” and “Desperate Housewives” to the site.

In addition to providing content, Disney will also make a financial investment in the site, although Hulu officials declined to provide details on the deal on Thursday.

Hulu has emerged as one of the most popular online video destinations since its launch in 2007. Last month, some 380 million videos were viewed on Hulu, up 14.3 percent from February, according to market research firm comScore. It is now among the top three online video sites in the United States.

The addition of Disney means that the owners of three of the four major broadcast networks — ABC, NBC and Fox — have partnership stakes in Hulu. Only CBS Corp’s CBS is absent from the arrangement.

Hulu Chief Executive Jason Kilar said conversations with CBS are continuing. “We’d love to have them be a part of Hulu … ultimately it’s their decision,” he told Reuters in an interview.

In a statement, CBS said it believes in “controlling our own rights” for content across media.

“CBS has long employed open, non-exclusive content partnerships that allow fans across the Internet to engage with our programing in such a way that we control our distribution, sales and profit,” it said.

OWNERSHIP STAKES : Other media companies — including Viacom Inc — provide movies or TV shows to the website, but do so in deals that involve only advertising revenue sharing and not ownership stakes.

The only other ownership stakes are held by Providence Equity Partners and employees of Hulu.

Disney, which will gain three seats on the Hulu board, has previously sought to expand viewership of ad-supported ABC shows offered on ABC.com and websites of its local TV affiliates, on AOL.com, and on Comcast Corp’s Fancast site.

To grow further, Hulu is studying adding music videos, sports and news, while it is also looking at expanding the service outside the United States.

“We would like to continue to have as much premium content to possible,” said NBC Universal Chief Executive Jeff Zucker in an interview.

“Then expand Hulu internationally — that should be the goal for 2010,” Zucker added, declining to say what markets the partnership is considering.