Why Newfound Concerns Over Hulu’s Ad Revenue Are Overblown

After months of being a media darling, Hulu lately has come in for some criticism, most of it centered on the company’s ad sales. The gist of the criticism is that the sales of ads at the Internet TV service aren’t keeping pace with its surging traffic over the past few months. BusinessWeek kicked off the coverage, and others also chimed in. What started it all was a report by Screen Digest analyst Arash Amel pointing out that although Hulu grew its traffic by about 50 percent between October 2008 and February 2009, it has not been able to sell ads at the same clip. Amel said Hulu is selling about 60 percent of its ad inventory, with the rest being filled by public-service announcements, which led Amel to cut his estimate for 2009 Hulu revenue to $120 million from$180 million.

But is the 60-percent figure really all that disappointing? I don