Walt Disney Co., seeking to broaden the audience for its broadcast and cable shows on the Internet's most popular video site, struck a deal Monday with Google Inc.'s YouTube to distribute short-form content from ESPN and ABC.
The agreement would extend the Internet reach for ESPN's sports highlights and ABC News updates and provide another outlet for video snippets taken from the ABC broadcast network and ABC Family cable channel shows. Disney hopes the arrangement will bring its advertisers to YouTube, a site that has 100 million monthly visitors but has had difficulty making money off "user-generated content." Disney would keep the majority of the proceeds, YouTube said.
YouTube, which established its popularity relying upon quirky, short-form videos submitted by the public, has increasingly been turning to professionally produced content from Hollywood. The site once defined by skateboard pratfalls and the lonelygirl15 "webisode" series now carries dozens of feature films and hundreds of TV shows -- albeit older fare, such as the original "Beverly Hills 90210" and "MacGyver" series.
"Ultimately it puts more content in front of our users that ABC and ESPN are able to monetize," said Jordan Hoffner, YouTube's director of content partnerships. "It's one of those where everyone wins."
Amateur Web videos, while attracting millions of viewers, have faced obstacles winning over advertisers. A newly released report from the Internet Advertising Bureau said video commercials accounted for just 3% of online advertising revenue last year -- or $734 million. The bulk of online spending still goes to search and banner ads.
"Google has been trying for a long time to figure out how to get advertising into YouTube," said Debra Aho Williamson, a senior analyst with eMarketer, an Internet market researcher. "It's got so many users, but where's advertising? It's obviously been frustrating for Google."
Providing a dedicated channel on YouTube where familiar names such as ESPN or ABC can be watched might allay advertiser concerns that their brands and products would end up adjacent to unsavory content.
"The more professional content that YouTube has, the more advertising revenue they'll bring in," Aho Williamson said. "Bottom line: advertisers want to go to a well-lit, comfortable place."
