Email | Print    Type Size  -  +

How Hulu became the season's hit

The "YouTube killer" launched a year ago amid tech industry derision. Now it's on a tear.

By Jessi Hempel, writer
October 31, 2008: 7:12 AM ET

(Fortune Magazine) -- Saturday Night Live isn't the only brand boosted by Tina Fey's Sarah Palin routines. If you're one of the millions who's watched those skits online within a week of their original broadcast, chances are you've seen them at Hulu.com. It's a big moment for the free video site.

Backed by News Corp. (NWS, Fortune 500) and NBC Universal, the "YouTube killer" launched a year ago with ten advertisers, scant content, and a lot of skepticism. But the site has grown fast, and in September, viewers watched Hulu clips 142 million times, a 32% jump from August.

Hulu has two things going for it: copious professionally produced content and stellar technology. CEO Jason Kilar's dealmaking with studios and networks has given the site a growing lode of stuff people want to watch - NBC's SNL, of course, plus Comedy Central's The Daily Show, Fox's House, and hundreds of other shows and movies.

As for tech advantages, Hulu uses one of the best videoplayers on the web. The picture is superb, as is the search function - type in "Angelina Jolie," and you'll get clips based on image recognition. Also much improved: antipiracy measures, which keep hit shows off YouTube in the crucial days after they first air and send viewers to Hulu instead.

YouTube, whose users watched videos 5.4 billion times in September, still dwarfs Hulu. But Hulu is winning over Madison Avenue. "Advertisers prefer Hulu over some of the user-generated video sites because it's approved original content," says Margaret Clerkin, co-lead of WPP's Invention Group.

Media buyers pay more to reach 1,000 viewers on Hulu than to reach the same number on primetime TV. Slight hitch: Hulu keeps only 30 cents of every dollar of advertising it sells; the rest goes to the networks and the shows' producers. The site won't be profitable until it gets a bigger share of those ad bucks. But with more than $100 million in funding from its backers, Hulu has some time to figure that out.  To top of page

Company Price Change % Change
Advanced Micro Devic... 29.20 -1.16 -3.82%
General Electric Co 10.05 -0.18 -1.76%
Bank of America Corp... 27.93 -0.11 -0.39%
Facebook Inc 189.01 7.68 4.24%
Cisco Systems Inc 55.40 0.65 1.19%
Data as of Jun 17
Index Last Change % Change
Dow 26,112.53 22.92 0.09%
Nasdaq 7,845.02 48.37 0.62%
S&P 500 2,889.67 2.69 0.09%
Treasuries 2.09 -0.01 -0.33%
Data as of 1:32am ET
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Sponsors

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.