An interesting story on Hulu today in the New York Times from Brian Stelter and Brad Stone. It's a fairly balanced piece, noting both successes for Hulu (profitable for the last two quarters) and issues (it's content partners feel like they make a pittance in advertising revenue). It again floats out the potential for a Hulu subscription service, with an iPad application now added to that mix.
But as ever, Hulu chief Jason Kilar is a huge proponent of user experience. That's great for Hulu users like you and me, but not so great for its parents and content providers.
If Hulu can extract more ad revenue for an hour of viewing, the FX’s of the world may upload more shows onto the Web site. Already some of Hulu’s commercial breaks are a bit longer than they used to be, and some of its partners are eager to further increase the number of ads shown in an hour, but Mr. Kilar still believes that “less is more,” and he cites studies of the effectiveness of Hulu’s ads as evidence.
Nielsen will be testing “TV and PC” measurement beginning this summer with plans to roll it out for use by the end of Q1 2011. Online viewing will be counted in the C3 ratings (commercial ratings live and up to 3 days after the show airrs) so long as the online versions have the exact same national commercials that ran on TV. If they do that, they'll get paid for the online viewing just as they'd get paid for TV viewing.
One outcome of that you can count on is a lot more commercials online, at least the first few days after a show airs on TV. I’m not sure how Hulu will ultimately handle “PC and TV” But I don’t see NBC, ABC and FOX not wanting to go the “TV and PC” route with full commercial loads. Hulu of course could simply add a window for everything so that no new shows go up within 3 days, but I’m not sure that’s a great outcome for Hulu or its parents.
Jason Kilar continues to express, in public, a very vocal opposition to the kind of commercial load increases we'd be talking about here. But I can't help wonder whether Mr. Kilar will change his tune, or his place of employment. Is there a middle ground?