Disney, YouTube in original content deal

Disney (NYSE:DIS) and YouTube are launching a partnership focused on a co-branded YouTube channel that will provide original content aimed at family audiences.

The deal is small by Hollywood standards, just $10 million to $15 million, initially, but it helps Google get its toe into Tinseltown, brings another big name to YouTube's original content plan it announced last month, and gives Disney access to a web audience of more than 800 million, an audience it so far has been only partially successful in reaching.

The content, said the two companies Monday, would consist of Disney-produced shorts, "video drawn from relevant family-friendly content currently available across YouTube," and "a blend of current Disney Interactive original series, select Disney Channel programming and Disney user created content." No financial terms were announced.

The first original content is expected to launch in February, and Disney would like to have eight original content series up at any one time, the Times said.

"It's imperative to go where our audience is," James A. Pitaro, co-president of Disney Interactive, told the New York Times.

YouTube meanwhile, has been busily adding content to its site, and announced last month that it planned to create some 100 channels of premium content in partnership with entertainers and other subjects. The company in early October also was rumored to be willing to put up $100 million for original content.

YouTube reportedly believes that its bargain ad rates--they're lower than sites like Hulu, for example--and targeted advertising format can be highly lucrative in the right setting.

One ad exec told The Wall Street Journal that the site's new strategy "is a clear signal of its commitment to creating immersive and engaging original content."

In the latest venture, Disney reportedly will share revenue from its sales of the Disney ad inventory.

For more:
- see this NY Times article

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