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Hulu-Disney: Watching for the Deal's Winners, Losers

  |  May 12, 2009   |  Comments

Disney's decision to acquire a stake in the online video site could have fallout on other businesses.

A lot of digital ink has been spilled in parsing the recent Disney-Hulu deal, most of it laudatory for the young company. And hat's off to Hulu CEO Jason Kilar and his team for pulling it off. In addition to Hulu's solid base -- due to having content from Fox and NBC -- the online video site gets further validation in the form of Disney ABC's "Lost," "Desperate Housewives," and "Grey's Anatomy." This will help Hulu's model and hopefully bring much needed advertising revenue.

Here are a few other things to think about when examining this major announcement.

What does it mean for Move Networks and Microsoft's Silverlight?

For the first time, ABC is allowing its content to be shown using somebody else's player. Prior to the Hulu deal, Disney's ABC had always insisted that its content be viewed through its player, citing its commitment to the user experience. The ABC.com player is powered by Move Networks whose CEO recently stepped down; the company has been struggling to find its way after establishing a leadership position as the home of quality video streaming. Move Networks had been working with ABC and Fox to stream shows, but the Hulu deal now brings into question its relationship with ABC and Fox because it seems redundant (and possibly pricey) to have two separate technology solutions to deliver the same content.

Then, there's Silverlight, which Microsoft is pushing as a competitor to the ubiquitous Adobe Flash player at the center of Hulu.com. Silverlight has made solid inroads in sports programming, partnering with NBC last year to broadcast the Olympics and with CBS this year to stream the NCAA's Final Four basketball competition. But with Flash -- which powers YouTube, the defacto online leader in terms of traffic -- now getting even more premium content validation by this deal, it becomes increasingly unlikely that the folks from Redmond, WA can unseat the category leader. (What's more, Flash is migrating to TVs and devices everywhere.)

What Does It Mean for the Advertising Model?

A side note to the deal is that The Pool, an initiative from the VivaKi Nerve Center to pioneer online advertising, now has one more content participant to help craft new online advertising models. CBS Interactive, Discovery, and Hulu as well as Microsoft, Platform A, Yahoo, and Broadband Enterprises were already participating. With Disney now having a stake in Hulu, it too will have the opportunity and incentive to create a sustainable advertising ecosystem.

What Does It Mean for the Future of Hulu?

Lastly, while certainly a positive for two-year-old company, adding Disney to the fold also brings to mind another player from a bygone era -- the once mighty @Home network. The product of several cable companies -- Cox, Comcast, and AT&T -- @home was positioned to be the premier provider of high-speed connectivity. Well, after being one of the darling high-fliers of the late '90s boom, @home fell hard and fast.

One can't help but see some of parallels between @Home and Hulu -- companies made up of natural competitors working to be the innovative solution that helps bridge the old and the new. Problem is, when the new gets big how will these natural competitors (ABC, NBC, Fox) really get along?

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Todd Krieger

Todd Krieger is a creative thinker, a connector, and a believer in the power of a good idea. He likes playing among the diverse, and sometimes converging, worlds of publishing, entertainment, technology, and advertising and figuring out how best to leverage each for the benefit of the other.

His bona fides include stints at Microsoft, Yahoo, and Denuo (a boutique consultancy within Publicis). In that time he's produced hundreds of hours of award-winning interactive TV content, including NCAA Final Four Interactive and CSI Interactive. He also relaunched the broadway.yahoo.com vertical in tandem with American Express and helped bring to market the Internet's number one gossip site, omg.yahoo.com. While at Denuo, he worked with "The New York Times," Fox.com, and Condé Nast on how to transition their core print and broadcast assets into the digital world.

Todd has spoken around the world on issues of copyright, technology, and interactivity and has been published in "The New York Times," "Wired," "Premiere," "SPIN," and elsewhere. His book, "The Portable Pundit : A Crash Course in Cocktail Party Conversation" can still be found on Amazon. He lives in Venice, California.

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