Hulu was success story for 2008

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In the Wild West that is online video, Hulu.com has proved to be a trailblazing answer to how professional content can thrive on the Web.

It's this year's pick for Web site of the year.

"This is period of great experimentation in regard to media, in regard to online video," said Hulu Chief Executive Officer Jason Kilar. "You've seen a lot, you're probably going to see even more in terms of various business models, various interface designs."

Hulu launched March 12, a result of the unlikely collaboration between News Corp. and NBC Universal. Normally, such corporate fusion in new media doesn't pan out.

The blogosphere was doubtful. Before its name was announced, bloggers derided the project as "Clown Co."

"Boy, did we have to eat crow," Michael Arrington, of the influential blog Techcrunch.com, wrote recently. "I was wrong. Hulu rocks. Despite ridiculous odds, the company was able to pull of a joint venture between two humongous parent media companies and provides users with a compelling, sexy product."

Hulu is host for more than 1,000 shows, from Family Guy to Saturday Night Live . There are more than 130 content providers, not only NBC and Fox but also Sony Pictures Television, MGM Studios, Lionsgate, Paramount Pictures and PBS. The site's database of full-length films also has grown.

ComScore pegged its unique monthly visitors for October at 24 million. On average, a visitor watches 10 videos on Hulu a month, which is good enough to put Hulu sixth in videos viewed online.

That only garners Hulu about 2 percent of the online video market, far below the leading Google sites -- of which Google's YouTube is the big draw. Many believe Hulu is more appealing to advertisers than YouTube, though, and that Hulu's ad revenues could equal YouTube's by the end of 2009. (Hulu declines to share revenue figures but says it finished above internal estimates.)

Previously Internet-shy content providers -- notably the TV networks -- seem to have embraced the Hulu model. The Viacom-owned CBS.com recently relaunched in a design very similar to Hulu's clean, white interface and user-friendly functionality.

"The whole tenor of the conversation is markedly different, in terms of folks like Sony and MGM and Warner Bros. really coming on board once they realized what it was we were building," Mr. Kilar said.

Not everyone is on board, though. At the UBS Global Media and Communications Conference this month, Discovery CEO David Zaslav said his networks would not be putting their long-form content online.

Though Mr. Kilar doesn't pretend Hulu and its new model are yet fully formed, 2008 has been in many ways a banner year for professionally created online video.

Next year, Hulu hopes to expand internationally. Rights issues -- often different by country -- have made such expansion a thorny prospect.

Mr. Kilar also hopes to make Hulu more broadly syndicated across the Web.


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