27 June 2011


Hulu.com, the online video site considering a sale, reached a tentative agreement for renewed rights to television shows from its part-owner, Walt Disney Co., according to two people with knowledge of the situation.

The agreement with Disney, which operates the ABC broadcast network, is similar to Los Angeles-based Hulu’s new arrangement with another co-owner, Fox parent News Corp., said the people, who weren’t authorized to speak publicly. The News Corp.-Hulu renewal was reported by Variety this week.

Renewed license agreements will make the website more attractive in a sale, said a managing partner at New York-based management consultant Cg42 LLC. The new agreements will allow more ads to be sold against current shows, including “Modern Family,” which airs on ABC, and Fox’s “Family Guy,” the people said.

A deal is relatively unlikely without the agreements. Any deal would be contingent on ongoing access to that content.

The deals may be signed within weeks, the people said.

A “Modern Family” episode on Hulu includes about 2.5 minutes of ads. On a broadcast network, commercial time totals about 8 minutes per half hour.

Hulu Chief Executive Officer said in a February blog post on the site that, with fewer ads than traditional television, the website is a more effective marketing medium.

A Hulu spokeswoman, declined to comment. A spokeswoman for Burbank, California-based Disney, didn’t respond to requests for comment.

Hulu, whose owners also include Comcast Corp.’s NBC and Providence Equity Partners, was approached by a potential buyer and is weighing its options, a person with knowledge of the situation said this week.

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