I Eat My Words: Hulu Will Shake Up the Online Video Market

OK, I will admit, I was busy sharpening up the knives at BoomTown HQ to prepare for the debut of Hulu this week.

Let’s just say that I have been dubious that two lumbering media companies–in this case, News Corp. (owner of this site!) and NBC Universal–could make more than a mishmash of premium video, especially given Hollywood’s glacial and cloddish approach to the Web.

Not so with regard to Hulu, whose name is still arguably as goofy as ever.

From a demo (here are some screen shots of pages) I was given Friday by Hulu CEO Jason Kilar, the boyish former Amazon exec who seems to have learned to swim well with the Hollywood sharks, I am impressed thus far.

I will, of course, reserve judgment until I get to test-drive it for a while, but in concept and tone and aims–that is, more open than I ever expected the service to be–it is off to a good start. (Actual reviews of these sites I will leave to Walt Mossberg.)

By way of background, Hulu was announced to much fanfare and much more dubiousness, given that joint ventures between media behemoths tend to be like two elephants dancing gracefully. That is, not.

Even within the companies, there was much pooh-poohing of the idea, with some divisions silently vowing noncooperation, even though bosses–like NBCU’s Jeff Zucker and News Corp.’s Peter Chernin–backed it strongly.

In addition, there are a plethora of competing efforts to digitally distribute premium content, of all different types, including the much-hyped Joost, Veoh, Babelgum and many others. Major networks are also offering streamed shows.

Let’s just say, it’s crowded and confusing out there, beyond the obvious news that consumers seem to like YouTube’s short user-generated videos and sampling all those tasty stolen clips from TV shows and movies. (Keep in mind, NBC pulled its channel off YouTube recently and still has no licensing deal with the Google-owned site.)

So how much premium content people are willing to consume in a legal setting–given all the restrictions and lack of ability to access and manipulate great content–is still unclear.

But it is a market major media companies need to wade into and fast, given another clear trend: most media will become digital in the next decade, desperately needing the much wider distribution only the Web can provide.

Enter Hulu, a venture that is approaching the market with a free, ad-supported browser product, offering premium video content, including TV shows, clips and a small handful of movies.

“We hope to grow over time in terms of content and functionality,” said Kilar (pictured here). “We obviously have to respond to the consumer from day one.”

Actually, there will not be many consumers quite yet. The site will not come out of private beta for some months, although its offerings will be available on portals, such as AOL, this week.

Here are some highlights and info:

• There will be no user-generated video. Sigh.
• There will be no download of material. Whine.
• Videos can be embedded in any Web site and shared using email. In the niftiest feature, you can cut your own clip.
• The player is one created by Hulu, using Adobe technology. Very nice.
• Content on Hulu, which is pretty good to start, is mostly made up of TV shows from Fox and NBC, and more than 15 cable channels including Bravo, E!, FX, SciFi, Sundance and USA.
• The site has most of the prime-time hits from FOX and NBC, including “Heroes,” “30 Rock” and “The Simpsons.” But I prefer the oldies like “The Mary Tyler Moore Show,” “Lost in Space” and “Kojak.”
• Movies–there are only under a dozen–will come from Fox and Universal, as well as from Sony and MGM (who will also provide TV fare). More movies please!
• TV shows will become available after they have aired on regular broadcast television. The new ones will only be the last five episodes, which is not a good thing and should be changed.
• Other cool tools: You can leave reviews and vote shows up and down; you can pop out a video from a window; you can darken the rest of the page, for better viewing.
• Advertising varies: sometimes in the video, sometimes overlaid on top or sometimes nearby. Standard, and it would be nice to see some innovation here.
• Major initial advertisers are Cisco, Intel and a bunch of car companies (Toyota, Nissan and General Motors). Cisco?
• Major portal partners include: AOL, MSN, MySpace, Yahoo and Comcast’s Fancast.

Along with the private beta rollout, Hulu also announced confirmation of a well-known $100 million investment by Providence Equity Partners for the joint venture.

There are, of course, a lot of open questions, such as how costly all these media rights are and how to make advertising pay for them. And it is not clear consumers are willing to embrace yet another destination site.

But Hulu’s willingness to send its content far and wide from the get-go, with very little friction and using easy tools to do so, is perhaps the most compelling aspect of its debut.

Finally, someone in Hollywood has realized that ubiquitous distribution, which is being driven by consumers’ desire to move their media anywhere they want, whenever they want, is the future.

Now if Hulu could just bring back “Arrested Development”–Steve Holt!–we could all be happy.

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