Walt Disney Co. (NYSE: DIS) is joining forces with Google Inc.’s (NASDAQ: GOOG) YouTube video-sharing site.
Under the terms of the deal, YouTube will offer clips from Disney’s ESPN and ABC networks. The ESPN channel will launch mid-April and the ABC in mid-May, according to paidContent.org, which first reported the story.
The agreement is clearly a win for YouTube, which despite generating about $500 million in revenue is not profitable. The Wall Street Journal notes that Disney will share the revenue with YouTube from ads sold against its content. It will also test preroll ads and feature ESPN’s video player on its channel.
One downside from Google is that Disney is hedging its bets. The media company is holding talks with Hulu, a rival video site backed by General Electric Co. (NYSE: GE) among others about broadcasting ABC shows. ESPN is not part of those discussions.
YouTube and Disney had held discussions about showing full-length ABC episodes on the video site but the talks went nowhere, according to the Journal.
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