Let’s be honest — Disney took its sweet time in partnering with Hulu and YouTube. But, chief executive Robert Iger says upping Disney’s online video reach was always part of the plan. During Iger’s keynote at the Cable Show conference in D.C., the Disney executive argued that the industry’s survival hinges on embracing online video rather than yanking content.

To note, Disney already has a relatively solid track record in the online space. Disney-owned ABC eventually became the first network to stream full-length ad-supported episodes online, and Disney also broke ground by being the first programmer to pen distribution deals with iTunes. During his keynote, Iger advanced this stance by arguing that broadcasters and cable providers should leverage openly available online outlets, rather than forcing viewers into “anti-consumer” and “anti-technology” multi-channel subscription services.

Of course, Iger’s anti-consumer/tech sentiments are correct. The growing popularity and content deals surrounding free video sites like YouTube and Hulu are indicative of consumer desire. As online video outlets sprout up, viewers will have the means to discover new content in a wealth of ways. Iger argues that the best way for Disney to take advantage is by having its online video serve two purposes: to extend its core brand, and to expand its primarily TV-based viewing audience. Naturally, the practice of yanking freely available online content in favor of a proprietary solution runs counter to those goals.

But, that doesn’t mean the freshly inked deals with Hulu and YouTube will grant unfettered access to Disney’s catalog. What Iger is promoting is the use of Hulu and YouTube to whet viewers’ appetites — not to satiate them. For online video fans, this still means a rotating patchwork of shows and limited episode availability on a given site.

Though this might be disappointing for those wanting to watch every single “Lost” episode for free, it’s still a smart move for Disney. Hulu and YouTube have excelled because they’ve made the commitment to build online video destinations. By offering a wealth of content from a number of providers, they’ve created environments where users can watch shows from multiple providers in a convenient location. Rather than trying to build a proprietary (and likely subscription-based) alternative, Disney is probably better off enriching those sites with compelling selections from its catalog.

….at least for now.

Photo courtesy of Walt Disney Co.

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