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I took the ABC.com player for a spin the other day, the first in a while, popping in through Fancast. I had to agree to some terms and download the player, a quick glimpse of why this strategy doesn’t work well for the casual fan. Then I had a kind of Lost flashback, whirling back three years to how wowed I was the first time I saw the player and how unusual it was then to go to a network site to stream hit prime-time shows on demand as long as I agreed to see a few ads.
Just as it had a few months earlier, when CEO Bob Iger stepped out on a stage with Apple’s Steve Jobs and announced that Disney (NYSE: DIS) would be selling video downloads through iTunes, ABC changed the game for broadcast network online video. The Move Networks player won an Emmy, ABC.com served up some good stats and ABC decided to marry its online programming to its own player. Its few outside video deals with AOL (NYSE: TWX), Fancast and Veoh all required use of the player so Disney could manage the viewer experience.
Fast forward to April 30, 2009, three years from the day that trial launched, and the announcement that Disney is taking a stake in Hulu. Outgoing News Corp (NYSE: NWS). COO Peter Chernin and NBCU Chairman and CEO Jeff Zucker are the media execs who zigged when Iger zagged, putting their clout and resources behind a risky joint venture that could have tanked completely and instead became one of the best user experiences around for online video. And, this time, Disney is the company following, not leading.
That’s not how Disney sees it, of course, no matter what some execs might say privately. And while outsiders — and more than a few insiders — see Disney’s equity stake in Hulu as a sign that the company’s control-the-experience concept had stalled, in an interview after the deal was announced, Anne Sweeney, co-chair, Disney Media Networks and president, Disney/ABC Television Group, offered it up as a natural extension of a long-term strategy:
“We don’t consider it a change in any way. If you look back starting with the the iTunes deal in October 2005, that was a very bold and gutsy move. That was really the deal and the moment that I think changed our culture, not just at ABC but at Disney when it came to the digital distribution of our content.”
Sweeney, who was surprised at first when I described my recent experience as frustrating compared to an instant click service like Hulu, added: “We took a couple of years to really refine the business model, figure out the user interface, figure out how to make it a business and how to make it something that viewers wanted. Then we looked at usage so we could understand the next best step to take. And today we’re announcing Hulu.” (Earlier this month, Disney also announced a short-form deal for ABC and ESPN with YouTube, that allows access to ABC clips through the YouTube player.)
— Would she consider switching to the Hulu player for everything? “No, because I think there’s value to both. We actually found that the usage is different — (according to comScore) 8 percent of the ABC.com viewers go to Hulu and 13 percent of the Hulu audience goes to ABC.com. The ABC.com player is probably helping the tried-and-true ABC fan catch up . The Hulu player is providing more of the casual viewers, people who don’t think to come to ABC first. I look at it as the natural evolution of our strategy.” She said the company will continue to use, support — and innovate — its current Move player: “I think that’s going to do a different piece of business for us. .. We end up superserving our core ABC viewers while attracting new viewers through Hulu to our shows.”
— What has been described to me as dissension – and strong disagreement — between some at ABC and corporate over the move, Sweeney calls “debate.” There was a lot of debate when we went into the iTunes deal. There was a lot of debate when we launched ABC.com. These are real sea changes in the way content is distributed. Believe me, you want the debate. You want all opinions on the table. You want to make smart decisions.”
— Is there an advantage to ABC to having three big networks at Hulu? “I don’t think of them as networks. I think of them as content engines. Is there an advantage to having hit shows available? Yes.”
— Does this deal in any way keep Disney from participating with TV Everywhere or any of the other efforts to limit some programming to pay TV subs? “We’ve been conversations about what they call authentication or TV Everywhere with all of the MSOs out there. We’re open to the adoption of an authentication system but we also know that — and Bob said it recently at NCTA — that progress on authentication is really going to require a high degree of cooperation around the industry because there are a lot of technical and coordination issues that need to be addressed.”