An Online TV Site Grows Up – HULU
April 17th, 2012 by admin

Five years ago, some of the most powerful players in television banded together to introduce Hulu, a streaming service intended to revolutionize the TV industry.

This week, Hulu will look more like a traditional network than an Internet pioneer.

At a presentation on Thursday in New York, Hulu, created as a service for watching network television online, will pitch advertisers on original programming in an annual ritual known as upfronts that are typically reserved for cable channels and network broadcasters.

Hulu executives are expected to take the stage to sell advertisers on new series. The executives will also promote the service’s desirable demographic of young viewers who turn to Hulu for popular network sitcoms like “New Girl” and “Family Guy,” available only after they are broadcast on Fox.

As an online television destination, Hulu is something of a teenager now, sometimes tolerating feuding parents and succeeding perhaps in spite of them. Hulu is growing steadily, despite disagreements among its corporate owners, and the new restrictions those owners have placed on free streaming of network shows.

This week Hulu will announce that it has topped two million subscribers for its $8-a-month Hulu Plus service in the first quarter, half a million more than it had at the end of 2011. But it has not been an easy path to growth.

The executives who were the greatest champions of Hulu at its inception — Jeff Zucker, the former chief executive of NBCUniversal, and Peter Chernin, formerly the chief operating officer at News Corporation — have moved on. Their successors are less enamored with the service, which they view as a potential threat to traditional revenue streams. Hulu’s owners are the Walt Disney Company, the News Corporation’s Fox Broadcasting unit, Comcast’s NBCUniversal unit and Providence Equity Partners. In 2007, when Internet television viewing began to take off in earnest, Hulu’s corporate parents raced to create a legal TV-streaming service supported by advertising. But more recently, those corporate parents have struck multibillion-dollar streaming deals with cable and satellite operators to make shows available online to their subscribers with tablets or smartphones.

Even though its audience was growing — and continues to grow — Hulu’s corporate parents questioned whether giving their shows away online could put at risk the hundreds of millions they earn from traditional cable and satellite deals. Hulu has embraced its new reality, and has maintained growth while doing so. With roughly 38 million visitors a month, according to the measurement firm comScore, the service had revenue of $420 million in 2011, up 60 percent from $263 million in 2010.

Attesting to the shift toward subscriptions, the company expects revenue from Hulu Plus to account for more than half of its total in 2012.

“The bulk of our business is working with those big media companies, and they’re going to make choices based on how they see the whole ecosystem evolving,” said Andy Forssell, Hulu’s senior vice president of content.

But Hulu still has to figure out how to marry its own subscription service with the systems that are being set up by the cable and satellite operators.

A few years ago, Hulu had a motivational effect on the media industry. It is widely credited with accelerating a trend toward on-demand television that forced networks and studios to figure out what to stream online, and what not to stream.

Some shows, like “Community” on NBC and “Fringe” on Fox, have benefited markedly from online streaming. “If we’re really on our game, people will look back on it and will say, ‘Wow, I can’t believe TV was like that in 2007,’ ” Jason Kilar, Hulu’s chief executive, said at a recent advertising industry conference. He declined interview requests for this article.

By  and  NYT