Looking to reach a wider audience with its sports content and other shows, Disney Media Networks has made an agreement with YouTube to launch multiple ad-supported channels featuring short-form content from Disney-owned ESPN and the ABC Television Group.
The agreement allows Disney to sell its own advertising inventory within the ESPN and ABC channels. The roll out is scheduled to begin in mid-April for ESPN and early May for the ABC Television Group channels, which will include ABC Entertainment, ABC News, ABC Family and SOAPnet.
The agreement allows both companies to share revenue from advertising shown along with short videos, such as sports highlights, show recaps and original Web series. However, the deal doesn’t include full-length sporting events or TV programs, which are increasingly popular online.
The ESPN video player will be integrated into ESPN’s channel on YouTube and will play a variety of sports content and highlights on the site.
“This deal provides us with the opportunity to reach a broader online audience, to experiment with different monetization models and to extend the reach of our advertisers within branded environments that they most desire,” said Anne Sweeney, co-chairwoman of Disney Media Networks.
While Disney is attracted to YouTube’s extensive reach and new advertising possibilities, the company was careful to omit long-form programming from the deal. This is because cable operators are worried about the proliferation of online video causing subscribers to turn off their cable service.
At the Cable Show in Washington, D.C., last week, cable executives, including Disney CEO Robert Iger, supported the idea of allowing their subscribers to watch cable programming online; however, the cable industry must overcome several technology issues including the easy and quick identification of legitimate subscribers before they move to providing long-form programming online.
Disney was said to be negotiating with YouTube for long-form programming; however, sources said such a scenario is unlikely to happen. That said, YouTube was pleased to get the ABC presence.
David Eun, VP of strategic partnerships at Google, said YouTube is now being recognized as a way to reach a huge and engaged audience. “Our diverse collection of ad products, content ID tools and sophisticated online analytics provide studios like ABC with innovative monetization options, more control over their online content and granular insight into how audiences are interacting with their videos,” he said.
George Bodenheimer, president of ESPN and ABC Sports, said the YouTube venture presents an “extraordinary opportunity” for ESPN to create new revenue streams and new value to advertisers in the digital environment.
The ESPN-YouTube channel will be supported at launch by advertising like YouTube’s InVideo overlays and traditional display ads. However, as part of the agreement, ESPN and ABC will also be able to test preroll advertising on short-form content.
There are also reports that Disney is in talks with Hulu, a video sharing Web site, about hosting long-form episodes online. A deal with Hulu would be separate from the YouTube contract and would not involve the same content. A Disney-Hulu deal, reports said, would probably involve an equity stake for Disney in Hulu.
