Hulu, Plus or Minus

The Los Angeles Times subjected Hulu CEO Jason Kilar to a less-than-strenuous Q&A last week, and the results were mostly meh. Did the paper follow up on its own reporting about the mouth-foamingly negative reaction that the new pay service Hulu Plus is receiving on iTunes? No. Did it inform us that Kilar is a nerd for Charlie Rose? Hell, yes. Journalism: now more than ever.

To be fair, the interview did attempt to make clear the difference between Hulu’s traditional free service and the new pay model. That no clarity was achieved had more to do with Kilar being intentionally vague than with the questions posed. The executive also crowed about the fact that Hulu has already exceeded this year its $100 million advertising revenue total for 2009. If you’re keeping score at home—and has anyone ever actually kept score at home?—$100 million is less than half what NBC earned in ad revenue from the 2009 Super Bowl.

Reviews of Hulu Plus have been about as enthusiastic as reviews of “Sex and the City 2” and the Toyota Prius’ braking system. (Fortune’s J.P. Mangalindan: “I gave my credit card info, downloaded the Hulu Plus apps for my iPhone and iPad, and prepared myself to be ‘wowed.’ I’m still waiting.”) That’s a shame, because someday the companies that produce content—including News Corp., NBC Universal, and the Walt Disney Co., which co-own Hulu—are going to need to figure out how to make people pay to watch online what they’ve already become accustomed to watching for free. To do this, they will need to win a bloody victory over the cable companies, which want to preserve their chokehold on television distribution. The L.A. Times asked Kilar who would win the battle between cable providers and the Web, but Kilar evaded, giving an unquotable answer about great services needing to work for content owners and customers and blah blah blah holy crap that guy is boring.

But the real answer is obvious. Despite Hulu’s best efforts to immolate itself, its audience is growing. As Trefis.com reported, Hulu reached 813 million unique streams in May. No matter what traditionalists contend, the future of the industry will flow through servers. But someone is going to have to figure out how to monetize that future if anyone—actors included—expects to ever make any money from this stuff. That someone is going to have to be smarter than the folks who thought up Hulu Plus.

Comments

[R. Peete]

Loved the writing and the story: not the same "blah, blah, blah."