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Hulu's meteoric rise as the online video site of choice for big media companies looking for online distribution has attracted another equity partner: Disney.

The Walt Disney Company has announced a deal that sees Disney taking a 27% stake in Hulu and receiving 3 seats on Hulu's board. Hulu is now owned by Disney, News Corp., NBC Universal and a private equity firm.

As part of the deal, Hulu will have expanded access to full-length episodes of some of Disney's most popular content, including hit primetime programs like Lost, Desperate Housewives and Grey’s Anatomy.

According to News Corp.'s president and COO, Peter Chernin, "Hulu, quite simply, now has the best premium content on the web". It's hard to argue with him. Hulu's incredible growth is reflective of two things: the fact that content is king and when quality content is presented through a quality user experience, good things happen.

When Hulu was still on the drawing board and before it even had a name, skeptics questioned whether a big media internet joint venture would go anywhere. Google referred to the nascent company as 'ClownCo'.

So it's with some irony that the biggest loser in the Disney-Hulu deal is Google/YouTube. While Google has made inroads with media companies, there's still quite a bit of tension between them and it was late to the game in adjusting YouTube's strategy and design to better accommodate the demand for high-quality professional video content online.

Hulu was focused on meeting this specific demand from day one; the only question was whether it could execute on developing a compelling platform. Big media's track record in this area wasn't very impressive, so the skepticism over Hulu wasn't entirely misplaced. But past isn't always prologue and writing off your competition before you see it, as Google apparently did, is usually not a smart strategy.

In this case it definitely wasn't. Hulu has created a compelling platform and thanks to Hulu's big media relationships, acquiring the content needed to make that platform a success hasn't been as much of an obstacle as it has been for Google. Throw in the fact that Hulu can sell ads against content advertisers are already buying against on television and the fact that Hulu doesn't have to deal with storing and serving loads of user-generated content that can't be monetized and you have what looks like a winning recipe.

The lesson here for us is that in business, sometimes the tortoise does beat the hare. In today's fast-moving internet economy, it's easy to forget that building towards long-term success is a marathon; the fastest guy off the starting line usually doesn't win the race.

Photo credit: cliff1066 via Flickr.

Patricio Robles

Published 1 May, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (1)

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Claire

I never really came across Hulu until a few weeks back. It is a shame it is only available in the US. I hear they are developing a UK version, which i am looking forward to seeing what it has too offer. I can imagine it will be pretty big, and i for one, wil probably be watching it more than my TV! Plus you could get rid of your TV license and watch it all for free!

about 7 years ago

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