NEW YORK (AdAge.com) -- The Walt Disney Co. signed a deal with Google's YouTube to put short clips from ESPN, ABC and several Disney cable TV networks on the world's largest video-sharing service.
The deal is another, albeit small, step in YouTube's effort to make inroads with the major TV and film studios and, by extension, major brand advertisers, which have steered clear of the kind of user-generated fare that made the video-sharing site famous.
It's also a significant step for Disney, which has been very selective in choosing its distribution partners. Until this deal, ABC.com had distributed video only through the sites of its own broadcast affiliates, AOL and Veoh, the video site backed by former Disney CEO Michael Eisner. YouTube vastly increases that distribution, though it will be mostly promotional, because the deal covers only certain clips.
YouTube will embed ESPN's proprietary player for sports clips, much like it did in its deal with CBS for the March Madness college-basketball tournament, which uses Microsoft's Silverlight media player.
But in a departure in strategy, ABC will allow its clips to be played in YouTube's own player. In the past, ABC has insisted that distributors use the ABC.com player, developed by Move Networks, which helps the company better control the user experience, as well as the advertising. That has limited the number of third-party distributors.
If ABC has become flexible on that requirement, it's a sign a deal with the NBC Universal and News Corp. joint venture Hulu could be in the offing. Disney has been talks to take an equity stake in Hulu in exchange for providing it with full-length ABC shows. Those talks have gone on for some time but have recently become more serious. As part of the deal, ABC would allow its shows to be streamed in Hulu's format, just like NBC Universal and News Corp. programming.
ABC recently began advertising on Hulu, which has long indexed and linked to ABC.com for shows such as "Lost" and "Desperate Housewives." ABC says 98% of its viewers come straight to ABC.com, however.
ABC and ESPN will have the option of selling the ad inventory across the clips, including pre-roll ads, YouTube's in-video overlays and adjacent display advertising. The networks also can share revenue with YouTube or allow YouTube to sell the advertising.
"This deal provides us with the opportunity to reach a broader audience, to experiment with different monetization models and to extend the reach of our advertisers within the branded environments that they most desire," Disney Media Networks President Anne Sweeney said in a statement.
YouTube has been pushing hard to sign new content partners without paying hefty upfront licensing fees, as it once did to the music labels.
The site is reportedly working on a redesign that will replace the "videos," "channels" and "community" tabs with "movies," "music," "shows" and "videos," a sign that YouTube believes licensed, professional content is the key to building a significant advertising business.