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Disney to launch ad-supported channels on YouTube

WALT Disney Co and Google Inc's YouTube said yesterday they have reached a pact to offer consumers advertising supported premium short-form content on the hugely popular video-sharing site from next month.

The deal will see videos from sports network ESPN from April and the Disney/ABC Television networks such as ABC Entertainment and SoapNet become available on YouTube from May. Disney Media Networks will have the option to sell its own advertising inventory within those channels.

The companies said that as part of the agreement, the ESPN Video Player will be integrated into ESPN's channel on YouTube and the sports network will also produce additional short-form content through YouTube's player.

ESPN content that is available on the ESPN channel and player will not contain long-form content from its linear networks -- such as cable television.

Disney has resisted making its original content widely available for free through third party distributors on the Web before now. But in recent weeks there have been reports of plans for the media company to partner not just with YouTube but also with Hulu, the online video service owned by News Corp and NBC Universal.

"This deal provides us with the opportunity to reach a broader online audience, to experiment with different monetization models and to extend the reach of our advertisers within branded environments that they most desire," said Anne Sweeney, co-chair, Disney Media Networks.

The deal will be a major boost for YouTube, which has struggled to convince advertisers to make a major financial commitment with so many of the videos dominated by clips uploaded by users.

The video service is easily the most popular online video service in the United States, according to data from Web audience measurement firm comScore, with more than 99 million unique viewers in February.

But despite that popularity it has been under pressure from Google investors keen to see the audience numbers converted to dollars. YouTube has yet to make a significant contribution to Google's bottom-line.

One sign that YouTube executives are prepared to start making compromises is that it has agreed for Disney to test pre-roll advertising on short-form content. YouTube founders Chad Hurley and Steve Chen have in the past said that pre-roll advertising would harm the popularity of its service as its videos are short-form.


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