Forrester: Hulu Should Please Advertisers, Viewers

by Gavin O'Malley, Oct 30, 2007, 6:00 AM

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Under the tightest controls, Hulu.com emerged from the lab on Monday to generally favorable reviews--or review, given that its creators had only briefed one analyst.

Forrester analyst James McQuivey was impressed with both the design features and business strategy behind the joint venture between NBC Universal and News Corp. It's launching with new and classic shows from NBC and Fox, along with an assortment of movies.

"They seem to have figured out that the best way to please advertisers is to maximize viewing of content, so they put the focus on facilitating viewing," McQuivey explained. "The design is very Apple-like--like you're choosing from the iTunes video store--and I mean that in the best way," he added.

Marketers that wish to get a peek at the highly anticipated site--which some have speculated could change the way consumers perceive long-form content online--must submit an email address and wait for an invitation.

Hulu is expected to remain in this "private" beta mode for several months, according to a Hulu spokeswoman. "This is not a marketing beta," the spokeswomen said. "This is a technical beta to make sure the site is working properly."

On the ad front, Jean-Paul Colaco has been named senior vice president of advertising for Hulu--responsible for ad sales and operations, along with the development of new ad products and services. Colaco most recently served as senior vice president of business development at Disney.

McQuivey believes Hulu is living up to its promise as a truly open platform, which will encourage the spread of long-form content around the Web. Hulu is expected to syndicate content over sites reaching a reported 96% of all Internet visitors--a key consideration from a business standpoint.

"NBC and News Corp. understand that TV is not about seeking out content," said McQuivey. "It's more passive; it's about letting the content come to you. They achieve that by syndicating the content to every point around the Web."

Adapting to changing consumer viewing habits, TV networks are slowly surrendering walled-off strategies for more open distribution models. CBS, for one, recently established a broad Internet distribution platform for its programming through deals with AOL, Joost, Comcast, MSN and Brightcove, among other partners. Earlier this month, ABC agreed to distribute its fall lineup of full-length programming through a Web portal on AOL Video.

Along with syndicating shows to top Web destinations, Hulu also allows viewers to embed streaming clips or entire shows' sites, like blogs. Since NBC and News Corp. announced plans for their partnership in March, critics have predicted its certain failure. Traditional media companies can't cooperate, they said.

Visitors who are granted access will find episodes from various series, including "24, "30 Rock," "The Simpsons" and "Hill Street Blues," and movies such as "Sideways," "The Breakfast Club", and "The Blues Brothers."

Other content providers to Hulu include MGM, Sony Pictures Television, Access Hollywood, Bravo, E! Entertainment Television, National Geographic, Oxygen, Sundance Channel, Sci Fi Network, TV Guide, USA Network, and World Wrestling Entertainment, among others.

Separately, Hulu closed a $100 million investment from Providence Equity Partners. In return, the private equity firm received a 10% stake in the venture.

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