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October 29, 2007

Hulu Debuts: Mostly Positive Reviews, Still Alot Of Skeptics

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NBC/Fox's Hulu video platform has just been released in private beta today, but some early product reviews are in. Most reviews are positive, but Silicon Valley Insider's Henry Blodget gives us a few pointers to remember before we make our final decision regarding Hulu's future success. Most of the positive reviews so far are just based on the ability for the user to watch TV and movies; however, Hulu owns none of this content. Nor do they have exclusive rights to the majority of the content, meaning it can also be found elsewhere. Hulu only gets 20-30% of overall platform revenues as they are responsible for their own overhead costs such as that of streaming video. If they involve a distribution partner at any point, the 20-30% will likely be halved. Because content is not exclusive, Hulu will not become a destination site and will likely have to involve a distribution partner at some point. As I write this, a just-released New York Times article states that the company already has five: Microsoft, AOL, Yahoo, MySpace, and Comcast. Even though NBC pulled their content from YouTube in support of Hulu, rumor is YouTube will probably be Hulu's primary distribution partner and their largest driver of site traffic. Does that mean that YouTube will demand more than half of the 20-30% of platform revenues for their part in Hulu's traffic? One thing that we do know for sure is that Hulu content is absolutely plastered with advertising. Hopefully the advertisers see some success out of this controversial product.

Via Silicon Valley Insider

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Posted by Justin Davey at October 29, 2007 4:53 AM

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