Disney eyes Hulu stake in content deal – Rumour

Disney is reportedly in talks to license ABC content to Hulu in exchange for an equity stake. Though neither party is disclosing any details, insiders claim Disney is seeking a stake equal to that of Hulu’s co-founders NBC Universal and News Corp.

Ongoing discussions between the firms have gained momentum in recent weeks, reports paidContent, citing three sources close to the negotiations. While the talks are focused around ABC content, the inclusion of other Disney-owned programming is said to be under negotiation. This could include content from Disney’s ESPN sports network and Disney Channel properties.

Hulu was founded in 2007 and is co-owned by NBCU and News Corp, which each hold a 45% stake in the firm. The remaining 10% is owned by venture capital firm Providence Equity Partners, which made a USD100m investment in the platform just months before its beta launch in October 2007.

Though News Corp and NBCU are unlikely to want to give up a large proportion of their stake in Hulu, the addition of premium content from ABC would be a huge boost as Hulu aims to consolidate its position in the US online video market.  The network is home to primetime cable shows such as Grey's Anatomy, Wife Swap, Lost and Ugly Betty.

The content would also help fill a gap left by Hulu's failure to negotiate terms with CBS, whose programmes are unavailable through the platform. Hulu recently pulled all its content from CBS' video-focused site, TV.com, citing "contractual" issues. CBS inherited the platform following its CNET takeover last year.

News of the Disney talks comes less than a week after Hulu secured the rights to stream UK TV shows, such Peep Show, Queer As Folk and Green Wing, following a new deal with the Digital Rights Group.

Rumours that Hulu is aiming to expand in Europe, with a UK launch, have also circulated in recent weeks.

According to comScore data, Hulu grew 33% between January and February 2009, leapfrogging both Microsoft and Viacom to finish fourth in the US video-streaming rankings in terms of both streams and users. The site streamed 333m videos in February, while unique monthly users increased by 42% to 34.7m.