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paidContent.org - It's Official: Disney Joins News Corp., NBCU In Hulu; Deal Includes Some Cable Nets

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Staci D. Kramer
paidContent.org
Thursday, April 30, 2009; 2:07 PM

The serious talks between The Walt Disney (NYSE: DIS) Company and Hulu we first reported a month ago finally have resulted in a deal making the company a partner with News Corp., NBC Universal (NYSE: GE) and Providence Equity Partners in the video portal and distributor. The deal, which has yet to close, adds ABC's prime time shows to Hulu as well as its daytime soaps and programming from ABC Family, Disney Channel and SOAPnet.

For Hulu, this is about more than getting ABC and Disney cable programming. To get ABC Disney on board, paidContent was told News Corp (NYSE: NWS). and NBCU?whose exclusive deals with the JV were set to expire late this year?agreed to a two-year extension that matches Disney's term and gives Hulu some breathing space as it continues to build out.

Disney gets three seats on the Hulu board that will be filled by Bob Iger; Anne Sweeney, co-chair, Disney Media Networks and president, Disney/ABC Television Group; and Kevin Mayer, executive vice president, Corporate Strategy, Business Development & Technology. Iger wanted the deal but I'm told Mayer was a big reason why it got done. More details from my own reporting after the jump, along with the full press release.

Here are some other details you won't see in the press release:

?Equity: The split comes down to 27 percent for each of the three for a total of 81 percent, according to one source. The remaining 13 19 percent goes to investor Providence Equity Partners and Hulu employees. (I failed to include the employee share last time I wrote about this.) Another source says not to get too hung up on the numbers but to focus on the equal governance rights and equal; responsibilities.

?Exclusivity: NBC and Fox exclusivity was in the sunset phase; matching ABC's two-year agreement means Hulu will be the exclusive off-network distributor for all three through the next two years.

?Windowing: Tricky, tricky, tricky. One person familiar with the situation told me that the networks will not have to make all the episodes they put on their own sites available to Hulu. For instance, ABC might put the trailing five episodes of Grey's and scattered back episodes on Hulu but could continue to make the whole library available on ABC.com through the ABC player. Update: Another source close to the negotiations said this is wrong and that the level playing field remains: if the network site has it, Hulu has it.

Click through: Currently, Hulu.com doesn't systematically push traffic to the network sites. My understanding is that would change and viewers would be offered the opportunity to click through for more in-depth content at ABC.com or the others.

?Distribution: The deal should keep in place the rights of each content partner to continue to work with current partners. Fancast, for instance, has deals with ABC and Hulu; my understanding is ABC could continue to work directly with Fancast even if the Comcast (NSDQ: CMCSA) portal fails to renew its agreement with Hulu.

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DISNEY TO JOIN NBC UNIVERSAL, NEWS CORPORATION ANDPROVIDENCE EQUITY PARTNERS AS AN EQUITY OWNER OF HULUFull Episodes of Hit Current and Library Programs Like Lost, Desperate Housewives,


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