Hulu Strikes New Commercial Deal With Disney
With speculation of a possible sale of Hulu, the big online video site has struck a new TV program deal with co-owner Walt Disney Co. that will bring more commercials to shows, according to a number of reports.
According to stories in Bloomberg and Variety, who first reported on the deal, the new agreement will include more commercial time during a typical TV program. News Corp., another co-owner of Hulu, recently made a similar deal, according to executives.
Currently, there are around four to six commercial messages in a traditional 30-minute or 60-minute TV show that runs on Hulu. Traditional national TV commercial loads can air twenty 30-second commercials in a typical hour-long show, and around ten 30-second commercials for a half-hour show.
Overall, non-program time -- which includes national commercials, local advertising and TV promos -- is around 14 minutes to 16 minutes for an hour-long show, and about eight minutes for a half-hour show.
Both Chase Carey, president/COO of News Corp. and Bob Iger, president /CEO of Walt Disney Co., have said Hulu needs to do a better job in monetizing its business. Hulu has said it expected to hit the $500 million revenue level this year.
Back in February, Jason Kilar, CEO of Hulu, had blogged about the positive consumer experience of TV programs on the Internet -- that they deliver fewer commercials than those same shows on traditional TV.
A Hulu executive had no comment; Disney executives did not respond to messages about the deal by press time.
Hulu, whose other two owners include Comcast Corp. and Providence Equity Partners, was approached by a potential buyer recently -- assumed by some executives to be Yahoo.
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More commercial time? I understand that Hulu wants to hit a higher revenue but having more commercials will turn many people off from the website. Could be a smart ploy to get people to upgrade to Hulu Plus though
This move should surprise no one.
My Grandpa Ricucci always used to say "you don't get something for nothing."