Rich Fiscus
29 Oct 2007 10:06
Today NBC Universal (NBCU) and News Corp. owned video venture Hulu enters private beta testing. Those companies and last minute additions which include MGM and Sony Pictures Television will be providing content for the site.
NBC in particular seems to be putting all their eggs in Hulu's basket. Earlier this year they announced the end of another online venture, which upset some network affiliates. August saw them in a very public dispute with Apple over iTunes pricing, which lead to a decision not to renew the company's contract with the world's largest online media store. Finally, less than two weeks ago they pulled the plug on their very popular YouTube channel.
So what does Hulu offer that has NBC executives apparently turning their back on nearly every other web outlet for video? To begin with it has content deals with that will make series like The Simpsons, 24, The Office, and Heroes available for visitors to view, send clips to friends, or even post on a webpage. Current deals will make the most recent 5 episodes of a TV show available at a time. It also gives NBCU a voice in pricing, the apparent key point of contention in their split with iTunes.
There appear to be two primary motivations for NBC's decision to make Hulu their primary partner for online video. It's likely the first is the company's mistrust of companies like YouTube, whom they don't completely trust to safeguard their copyright interests; something they apparently have in common with a lot of content owners. However, a second, much more compelling reason is simple dollars and cents. It's expected that nearly half a million dollars in advertising revenue will be shfting from television to online video, making television executives scramble to find online outlets to get their share of that revenue, or maybe more accurately to avoid losing it.
Other networks, like CBS, have decided to spread their content among third party service providers like Joost in an effort to reach a larger online audience. NBC, however, looks to be making a stand with Hulu. When the dust has settled it's likely to be seen as either a brilliant marketing strategy or one of the biggest missteps in television history.
Sources:
Variety
New York Times