• by Wayne Friedman , December 19, 2013

Although Hulu recently touted strong overall revenue growth in 2013 -- hitting $1 billion --- one media industry analyst worries over “deceleration” of ad revenues in certain areas.

Brian Wieser, senior research analyst, at Pivotal Research Group, estimates Hulu’s U.S.-based advertising revenue at $500 million -- 17% higher than in 2012. “This is a significant slowdown over growth levels from 2011 and 2012, which was likely around 30% in each of those two years.”

Some of the activity, he says, comes from inventory sales of Hulu package deals with traditional TV network inventory -- pitted against slower-growing Hulu direct digital advertising sales.

“This suggests that traditional TV buyers are increasingly ready to accept online video alongside their traditional TV buys,” Wieser writes. “However, to the extent this is correct, it also suggests a significant deceleration in Hulu's direct sales over the course of the year.”

Digital media buyers of premium video may have increasingly shifted media to non-premium and lower cost content, as well as toward programmatic channels, he says. For example, Wieser says digital media buyers may be putting greater media budgets toward Google's much larger YouTube video platform.

Wieser says Hulu books all revenues generated by its network owners -- ABC, NBC and Fox -- from their full-episode player sales as gross revenues.

Previously, these revenues amounted to approximately one-third of ad sales, he says, with the remainder generated via Hulu's own direct sales force, which sells inventory on a non-program-specific basis to avoid channel conflicts .