Summary:

The launch of Hulu Plus takes the online video joint venture started by News Corp (NSDQ: NWS) and NBC Universal (NYSE: GE) more than three y…

Jason Kilar

The launch of Hulu Plus takes the online video joint venture started by News Corp (NSDQ: NWS) and NBC Universal (NYSE: GE) more than three years ago into a new realm of complexity and potential. CEO Jason Kilar spoke with paidContent about the move into subscriptions soon after he made the announcement, in typical fashion, on Hulu’s own blog. No projections, no bold predictions about how the new service will do, although listening to him you get the sense that once again a service owned by programmers — NBCU, News Corp and now Disney (NYSE: DIS), along with investor Providence Equity Partners — has a better chance of succeeding because the exec in charge comes from Amazon (NSDQ: AMZN), not a network.

Kilar doesn’t see Hulu Plus, or subscription video in general, as the beginning of the end for the free, ad-supported experience. “I think the vast majority of content, the model that content owners will choose, will be free, ad-supported but there will also be opportunities to choose other models.” As I’ve written before, the company that became Hulu was always meant to have multiple business models and this isn’t likely to be the last one. (Kilar declined to answer questions about possible download options or electronic sell-through as the next steps.) Kilar comes at it a different way, explaining that the mission of Hulu is “to help people find and enjoy the world’s premium video content when, where and how they want it” — and that never constrained the company to one business model. Excerpts below:

Why so long? From the outside, it felt like Hulu was overdue coming up with a subscription product and the numerous reports, some on the mark but early, some fizzled added to that. Not so to Kilar. “I have a very different point of view on it, for what it’s worth. We just passed our two-year anniversary on March 12, so we’ve only been around for 24 months as a live service that wasn’t constrained by a password. When I look at our pace of innovation and all the things we did in those first 24 months, the fact that we’re launching such a significant, important and large service technically that we are today, I think that is actually incredibly fast.” Why did it feel slow from the outside? “We don’t comment on rumor and speculation and so those things tended to fill, you could argue, a vacuum. … There’s always going to be a lot of things written about Hulu that I think are rumors and speculation and they’ll be written at various times that we don’t have any control over.”

Why no new partners? Some of those reports had Hulu in discussions with CBS (NYSE: CBS) and others to be part of the new service. Those kinds of talks have taken place but Hulu Plus went into preview only with content from equity partners Disney, News Corp and NBCU and their brands. “Clearly, there’s an opportunity for us to expand that and we will but our first focus was to talk to our existing content suppliers.” Asked about CBS and others not part of Hulu now, Kilar avoided responding specifically about the one broadcast network that has stayed away from Hulu but said: “We have conversations with a lot of folks and we would love to welcome more and more content owners into Hulu and Hulu Plus. So please note, that has not changed one bit.”

He calls today’s program list “just step one,” adding, “we’re very excited about it if you take a look at the amount of content that’s available in Hulu Plus.” Kilar’s overview: over 100 content providers (that includes different content brands from each partner); hundreds of shows and thousands of episodes. Free, ad-supported Hulu has access to any of the content the equity partners put on their own sites. Citing confidentiality, Kilar wouldn’t say whether that extends to subscription content or whether Hulu has rights to any exclusive content.

Starting in preview: Hulu Plus “is a controlled-access service today” with access through invites following sign-ups online to ensure a better customer experience. Amazon vet Kilar well understands the complexities of mixing credit card payments with technology. “One of the things we anticipate happening in this period is that people will start to call Hulu a little bit more because there’s going to be more devices, we’re handling credit cards. … We want to make sure we’ve appropriately projected the amount of support we need to serve them well.” Plans calling for dialing up the number of invited each week, with daily meetings scheduled to manage the load. Kilar won’t say how many invites Hulu expects to extend, only saying “more the latter” when I asked if we were talking about thousands to start or tens of thousands and that the numbers aren’t “hardened.” “The next several months are going to be about sure that we are able to service customers in a five-star manner before we open it to begin with.” Expect the same conservative approach Hulu took when it started to let people into Hulu.com. “We want to make sure we scale the service appropriately.”

Hulu Plus innovations: This marks the first Hulu experience designed for tablets (iPad), mobile (iPhone), gaming (PS3 will be first), TV (Samsung) and more — and literally, each device gets a custom interface with new software. “You should expect to see us do that for other devices … Each one of those releases will be new software and new user interfaces that are optimized for the environment whether it be Sony (NYSE: SNE) Bravia TV or Vizio. The overall experience will vary a tad depending by device. For instance, Hulu will work over iPad Wi-Fi and 3G but will use HTTP live streaming with adaptive bit rate functionality to lighten the file load for the latter. Kilar explains: “It may not be as high resolution as if you were on Wi-Fi but you will still get the video playing in the same interface design.”

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