Disney wins the race to be third on Hulu

In Hollywood, there’s always a race to be the third studio into any new platform, format or distribution channel. No one ever wants to go first, because it usually means pissing off your existing distribution partners, some of which (Wal-Mart) have the leverage to make their displeasure hurt. Going second is okay, but you still take some heat and you look like you’re just me-too-ing the leader. The best place to finish is third.

Why third? For one thing, because the heat has usually dissipated by then. But most importantly, beause for whoever is behind the new platform or format, landing that third major is critical to making a go of it. You can’t really launch something with only two studios. So the third man in generally gets the same deal, or close to it, that the first two got.

After that, though, the checkbook generally slams shut, and the fourth, fifth and sixth guys in  get pocket change, if that.

The race to be third takes on particular urgency where the studios themselves take equity postions in the new platform. In those cases, the first two in have a joint venture. By the fourth partner, you have the makings of a conspiracy in restraint of trade and inevitable scrutiny from the feds.

In launching Hulu, Fox and NBC Universal solved the who-goes-first? problem by jumping together, Butch and Sundance style, and setting up a nice little joint venture. But there was never going to be more than one other slice to go around.

Which Disney has now claimed. The three companies announced today that the Mouse would become an equity partner in Hulu and begin making full-length episodes avaiable on the portal from ABC, ABC Family, The Disney Channel and SoapNet series. The announcement didn’t say how big a stake Disney gets, but John Paczkowski of All Things Digital pegs it at 27%, citing “sources.” That would likely put it just shy of Fox’s and NBC’s stakes and right in line with the typical prize for coming in third.

1 Comment

  1. I have been using Hulu for quite a while because Comcast site Fancast is also part of the Hulu model. Fancast brand started pretty much as a TV screen connected to a Hulu cable – VOD for web. Now the funny part is the cable company’s deal with providers such as HBO, Showtime, TNT, USA, SciFi and other so called cable channels.

    When at Hulu, CBS, WB, ABC viewing result in a redirect to their site. When at Fancast, ABC (include Showtime (aka CBS) as a 2nd example) does not redirect, however, the full length show count follows the wired-to-tv OnDemand or are zero. Again I suspect distribution rights holder twilight zone.

    I watched Hulu mutate due to distribution rights holder arm twisting. Disney is allowing Hulu to be the portal to ABC/ABC FAM sites. NBC is doing the same with it’s A-list TNT channel content also. The point seems to force viewer to endure all the crappy over designed marketing their flash sites have. Hope Hulu rides the storm and lives. Fancast has Comcast as it’s benefactor and has different problems than Hulu which I will skip for now.

Post a Comment

Your email address will not be published. Required fields are marked *