Disney and YouTube Make a Video Deal

Two powerful media companies, the Walt Disney Company and YouTube, are betting that a new partnership will help them surmount separate but equally worrisome hurdles as they each strive for greater Web dominance.

The deal is small on its surface: Disney Interactive Media and YouTube, a division of Google, will spend a combined $10 million to $15 million on original video series; those shorts will be produced by Disney and distributed on a co-branded channel on Disney.com and YouTube. The channel will also include amateur video culled from the torrent uploaded to YouTube daily. But the alliance is striking because of what it tacitly acknowledges about each company’s weaknesses. Disney, currently working on yet another overhaul of its Web site, is conceding that its own brand is not a powerful enough draw among children looking for video online; YouTube is viewed as being cooler. YouTube hopes to gain something from the Disney brand as well, namely credibility among parents, many of whom aren’t thrilled at setting their younger children loose on a site where the videos can be ragged and provocative and the comments even more so. The company wants to compete with cable television for ad dollars by adding more professional videos.