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Hello to Hulu

Hello to Hulu

NBC and News Corp.’s new online video venture, Hulu, has not-so-quietly launched its Beta testing phase. Invited users can watch recent episodes of shows such as The Office, Heroes, The Simpsons, and more. There’s also older favorites like Arrested Development and Buffy the Vampire Slayer. Even a limited number of films, such as Sideways and The Blues Brothers. What’s the point of Hulu? And, is it any good so far? For Business Week, Catherine Holahan offers an early look. Among the observations in her mostly positive review:

Building an online hub for premium content isn’t exactly a new proposition. Seemingly every major Web player from AOL to Yahoo! has developed a video site in hopes of cashing in on the growing number of U.S. Web surfers who watch video online and the advertisers who want to reach them. Roughly $2 billion is projected to be spent on online video advertising in 2009, according to eMarketer. That amount is less than 3% of the projected television marketing spend for that year. But online video advertising is growing fast—the rate was nearly 90% in 2007 over 2006—and the industry threatens to steal more of the television budget as technology improves.

Premium content is where many of the advertising dollars will go. That’s one reason why, though many online sites have sections for user-generated videos, they also have channels exclusively for the kind of professional, trusted content, such as broadcast television shows, with which advertisers are most willing to associate their brands. Even Google’s YouTube, the leading user-generated site, has channels with dedicated, branded content on which it has recently begun selling advertising.

Advertising on Hulu is refreshingly minimal. Full-length television episodes have a single sponsor. Users see a brief, 7- to 10-second message at the beginning of the show naming the sponsor and one 30-second commercial embedded in the show. There is also a sponsor banner advertisement affixed to the player.

Still, there are several challenges for creating a one-stop site for premium content. The first is convincing competing media companies to contribute content to the site. That obstacle has proven somewhat easier to overcome for online media companies such as Yahoo than for NBC and News Corp.’s Hulu.

I’m sure that Hulu will be one of many topics discussed during a panel I’m moderating (“Get It Out There: Distributing Your Online Video”) on Wednesday, at Digital Hollywood.

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