The Hubbub Over Hulu
In March, News Corp. (NWS) and NBC Universal (GE) made an announcement akin to an end-of-season cliffhanger. The media titans were teaming up to bring the best of prime-time TV and other high-quality programming to a new Web site they would develop together. The site didn't have a name. The shows it would feature were not yet known. The launch date was to be determined. But, if all went according to plan, executives promised the site would change the online video landscape. Just stay tuned, they said.
Five months later, the companies are finally revealing key details about the joint venture: The site's name is Hulu. And on Aug. 29, the Hulu team began accepting requests for inclusion in an invitation-only test, scheduled to begin in October with a few hundred people. "Our hope is that Hulu will embody our (admittedly ambitious) never-ending mission, which is to help you find and enjoy the world's premier content when, where, and how you want it," Hulu CEO Jason Kilar said in a statement.
A Few Details on Programming
Other than the name, which the company says was chosen for its fun factor and because it's easy to pronounce, the team would reveal little else about the much-hyped project. The home page features promotional shots from some of NBC's and News Corp.'s most popular shows: Heroes, Family Guy, The Simpsons, 24, and Friday Night Lights, to name a few. Yet it is unclear whether single episodes, entire seasons, or only clips of those shows and others will be available on the site. "We are still continuing to figure out the programming we will have at launch," company spokesperson Christina Lee says.
Others familiar with the site say all NBC programming currently available online will appear on Hulu and on sites owned by its distribution partners, which include Microsoft (MSFT) and Time Warner's (TWX) AOL. The site will also have content from Comcast (CMCSA), including shows on the Style and Golf channels, as well as shows from small networks including the Oxygen network, Sundance Channel, TV Guide, and National Geographic. Other major networks such as CBS (CBS), Disney (DIS) ABC, and Viacom (VIA) have not signed on.
The Hulu team also would not confirm a New York Times (NYT) report that it turned to a Rhode Island investment firm, Providence Equity Partners, for $100 million in cash—despite having two of the most deep-pocketed parents in the business.
Ready to Compete with Google?
All the mystery has some wondering whether Hulu stands a chance of challenging Google's (GOOG) YouTube, Joost, or the host of other video sites competing for user attention and advertiser dollars. Tech blogger Michael Arrington wrote in a March blog post that Google executives "have been referring to the project as Clown Co. privately" and that their YouTube business "doesn't look to be in any trouble."
In addition to competing with other networks' sites and those that rely on video generated by users, Hulu will also vie for attention with the properties owned by News Corp's Fox and NBC. As NBC sees it, that's not such a bad thing.
Some viewers will choose to watch its content on Hulu, where they can also watch shows from competing networks, and some will opt to watch on NBC.com. The point is, they'll be watching. "At the end of the day, we believe premium professional content wins," says George Kliavkoff, NBC Universal's Chief Digital Officer. "We believe there is power in aggregating that content, and we believe in ubiquitous distribution."
Still, whether the Hulu site will really draw in audiences depends largely on what it has to offer, says Paul Verna, senior analyst at research firm eMarketer. If it has a trove of easily accessible content that people want, along with, perhaps, some of the social features that people like so much on YouTube, it will grab an audience, says Verna. If it doesn't, people will just stay with what's familiar. "I think people do eventually reach a point where they just want to go to the sites they are familiar with," says Verna.
Blinkx Aims for "Ubiquitous Distribution"
So far, it seems that Hulu's offering won't have content from CBS and other major networks. That could change if Hulu gets a huge audience. Right now, however, CBS and others are focusing on distributing their content as widely as possible to the places where people are already watching. "CBS's strategy is to pursue open, multi-partner, nonexclusive relationships with established video destinations, widgets, and application vendor companies, as well as regular syndicators," says Quincy Smith, president of CBS Interactive. In short, says Smith, the company wants to "take it to where the eyeballs are."
That's on the social networks. Networks such as CBS and Fox see the potential to distribute their content, via shareable "widget" video players, on those sites. Hulu also plans to distribute its content, via a player, on all manner of sites.
Part of the wide distribution philosophy comes from the marketing value of having television shows near one another, instead of on unique silos around the Web. The wisdom is that, if a person is already watching—say, Fox's Simpsons—online they can easily be convinced to tune into Viacom's The Daily Show or NBC's comedy 30 Rock. That's why deals are being struck left and right to bring content together.
On Aug. 30, video search engine blinkx announced a partnership with Michael Eisner's new media studio Vuguru to bring the Web drama Prom Queen to its site. Already, blinkx brings together clips of premium content from around the Web via its video search engine, before directing users to where they can watch the full shows. "Ubiquitous distribution is primarily about marketing and building an audience around a product," says blinkx founder Suranga Chandratillake.
The point of spreading content around is that it also spreads around the ads, generating more revenue from additional viewers. Of course, that revenue is only extra if those viewers are not existing fans who would otherwise visit the network site but instead watch on a site where the ad sales must be split between a variety of partners. Hulu's owners will welcome the viewership however it comes. Now they need to ensure there's plenty to watch once there.