Speaking at the UBS 35th Annual Global Media and Communications conference on Monday, Zucker said online critics who had initially mocked Hulu as "Clown Co." had been forced to eat crow after being impressed with the site's user-friendliness and picture quality following its beta launch in October.

"Advertisers tell us they're looking for a place to have commercials run in a safe environment," said Zucker. Consumers just want ease, and that's what Hulu really offers."

He added that the video service, co-owned with Fox and offering episodes online of shows including "The Office" and "24," had drawn 60,000 users so far and seven charter advertisers. (Among them are Cisco and Intel.) The service is expected to go live early next year.

Zucker indicated that direct distribution efforts like Hulu, and partnerships with online outlets such as Amazon, would eventually help NBC compensate for the loss of $15 million in annual profit from its decision in August to stop selling TV programs through Apple's dominant iTunes service.

"There's no other place I can think of where the retailer also gets to set the wholesale price," said Zucker of iTunes. "All we asked for was the opportunity to be able to set a different variable price structure." Even so, the NBC chief said he hopes to patch things up with Apple to "get back to that $15 million at some point."

Despite his enthusiasm for Hulu, Zucker emphasized that NBC is taking a cautious approach to the digital world because the first-mover doesn't necessarily have the biggest advantage. "We have to make sure we're not replacing dollars with pennies," he said. "Nobody has really figured out the economic model that has made [digital] a significant part of their bottom line today."

In laying out NBC's major goals for 2008, Zucker placed digital development fourth after continuing to grow its cable operation, turning around NBC Entertainment, and expanding its cable business internationally. He said NBC would continue to refine its digital strategy and "try many different things."

Zucker identified the extension of its cable properties, especially in the realm of science fiction via the Sci-Fi channel, to the Internet as a promising area for online growth. "We're going to use those networks to grow organically digital assets that come off of them," said Zucker.

But a big hurdle to reaping benefits from the converging digital landscape is the lack of comparable measurement across different media platforms. Zucker blamed Nielsen in part for failing so far to devise a mechanism "to adequately and accurately measure" media consumption across platforms from VCRs to the Internet. For the amount NBC pays Nielsen, "we feel we should get better service," he said.

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