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Summary:

Hulu is often heralded as the perfect example of how to make premium online video content work: a clean, “well-lit” platform for brands, fav…

imageHulu is often heralded as the perfect example of how to make premium online video content work: a clean, “well-lit” platform for brands, favorable revenue-sharing terms for content providers, and a growing audience of ravenous video-viewers. But is Hulu’s business model all its cracked up to be? Panelists at Digital Hollywood bantered about what’s behind the Hulu hype.

Did Hulu make it “safe” for advertisers to work with online video content? Yes, according to Mark *Marvel*, msnbc.com’s senior director of video monetization. “It allowed TV advertisers to ‘buy brand’ against shows on the web. That shifted a ton of money online — and that’s why it’s the model we’re all stuck dealing with in slightly different ways.”

But was it really a “shift” in the market, or just an expansion? Online video advertising existed before Hulu. Kevin Yen, YouTube’s director of strategic partnerships, questioned whether the rival video site was getting too much credit. “They’ve been good for the online video business, so kudos to them. But there’s really been no insight into how well they’re doing financially. It’s not clear that what you’re reading in the press is their financial reality.” (Pot calling kettle black, anyone?)

Meanwhile, MTV’s EVP of digital ads Nada Stirratt questioned whether online video providers (even a company that has been TV-centric, like MTV) should even be trying to emulate TV’s content and monetization models on the web: “If someone really wants a TV experience, they’ll watch TV. And TV’s great for that. But the reason people go on the Web is for an engagement experience — being able to interact with other viewers, get commentary, see archives — and Hulu doesn’t complete that. It will be interesting to see what Hulu looks like in 18 months.”

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  1. Michael Berkley Wednesday, May 6, 2009

    "But the reason people go on the Web is for an engagement experience—being able to interact with other viewers, get commentary, see archives…"

    This is exactly what SplashCast brings to Hulu: "social TV". Here is a great explanation via TechCrunch of how Social TV with Hulu content works:

    http://www.techcrunch.com/2009/04/29/splashcast-figures-out-that-to-make-online-tv-social-it-is-all-about-the-chatter/

  2. Hey Michael:

    We covered SplashCast (along with View2Gether), too.

    http://www.paidcontent.org/entry/419-view2gether-raises-first-round-for-online-video-lounges

    I think social viewing add-ons definitely add value to the user experience, but I wonder if the sites will end up embedding this type of functionality in on their own (perhaps for viewers who aren't willing/able to find an app like SplashCast, etc.)

    Definitely think there's space for everyone to play — but it seems like common sense for the sites to try to make the viewing exp more "engaging" on their own.

  3. Michael Berkley Wednesday, May 6, 2009

    Indeed, Tameka. Thanks for the mention in your coverage last week.

    I agree with your point, however… Innovating a new TV experience, like "Social TV", requires a lot of dedication and experimentation, and it's not the focus of the video aggregators such as Hulu, TV.com, YouTube, etc. Social TV is a subset of online TV viewing — it will appeals to a particular demographic (a very large demographic), but not everyone. We believe companies like SplashCast and View2Gether are best suited to innovate in this niche.

    Thanks,
    Mike

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