Summary:

How is Hulu Plus doing? According to CEO Jason Kilar, the new subscription service is on track to pass one million subscribers and is set fo…

Jason Kilar

How is Hulu Plus doing? According to CEO Jason Kilar, the new subscription service is on track to pass one million subscribers and is set for a revenue run rate “north” of $200 million by the fall. The numbers were tucked into Kilar’s lengthy post post on the future of TV, which also doubles as a “state of Hulu” deftly timed with the news of a Viacom deal that brings Jon Stewart and Stephen Colbert back.

At $7.99 a month per sub, the Hulu Plus projections suggest the company is on track with its dual revenue stream model. The second stream comes from what Kilar calls “a modest amount of advertising (half the advertising that you’ll see on traditional TV).” The numbers aren’t shabby for a service that launched officially in November — Kilar says “to our knowledge the fastest start of any online video subscription service” — but Hulu Plus faces steep competition. More established Netflix (NSDQ: NFLX) said last week that it has passed 20 million subs.

Kilar also sent a message to content owners about compensation: “A key element of Hulu Plus is that we are able to compensate content owners more per-user per-month than anyone else for the same body of content. We are able to do this because of the subscription fee, our unusually effective and market-leading advertising service, and our tolerance for thin margins.” (Peter Kafka’s sources tell him Hulu will pay Viacom (NYSE: VIA) $40-50 million for Stewart, Colbert and other programming. Much of that will be available in Hulu Plus.)

Some other numbers of note:

– Hulu expects “to approach” half a billion in total revenues (advertising and subscription combined) in 2011, up from $263 million in 2010. That’s from $108 million in 2009.

– Kilar says Hulu continues to increase its monetization, hitting $0.185 per half-hour episode and claims the 2010 average of $0.143 is second only to broadcast.

The post itself is well worth reading for a sense of Hulu — and Kilar’s overall philosophy. I’ve seen a wave of react purporting that Hulu’s joint venture partners are irked as his take on traditional TV. I may be missing it but I’ve read the post a couple of times and don’t see anything that suggests a major attitude adjustment from when he was hired. Keep in mind that Hulu — as concept and reality — always has had opponents internally at *NBC Universal*, News Corp. and Disney. It doesn’t help that some of the remaining champions at *NBCU* are being taken out of the mix because of the DoJ-FCC requirements for the Comcast (NSDQ: CMCSA) merger.

Update: Fair point by someone I just had a chat with (not any of the direct stakeholders). Kilar’s ideas may not be a secret and people inside the networks may agree with much of it, but saying some of it out loud on a corporate site when that company is created by businesses relying on broadcast advertising and retrans fees is salt on a wound. Case in point:

For over 60 years, video advertising could only be bought via a TV show’s projected audience, which served as a blunt proxy for a certain target audience. The result has been many wasted impressions and an often irrelevant experience for consumers. In the near future, advertisers will demand the ability to target their messages to people rather than targeting their messages to TV shows as proxies for people.

But I don’t agree with the idea that running Hulu means you should leave talk about TV to the TV execs. Hulu and others that want serious amounts of online content need to make a case for it. True, it’s a case that may be better made when it doesn’t elicit comments like the one Jason Hirschhorn included in his Media Redef newsletter today — “Don’t sh*t where you license.”

You’re subscribed! If you like, you can update your settings

Comments have been disabled for this post