NBCU-NWS JV Hulu Launches With Private Beta Portal, Open Distribution; Sony, MGM Deals
After more than a year of speculation and months of promises, the ambitious gamble by NBC Universal ( NYSE: GE ) and News Corp. ( NYSE: NWS ) that they can create a major video service launches overnight on a variety of fronts. Dubbed Hulu, the video JV goes live with current and archived TV shows, clips and a cluster of feature films in a mix of private and public forms: small-scale private-beta destination portal hulu.com; distribution service Hulu on major portals, and shared/embedded video. CEO Jason Kilar explained during an interview/demo: “You’ve got a lot of passionate people ... It’s not just about hulu.com, it’s about the web, letting this content go out to the neighborhoods people frequent. We don’t want to assume the users will come to the content.” The multi-pronged approach should reduce some of the pressure on hulu.com’s private beta. Just as Kilar, who joined the JV several months after it was announced, refused to be pushed into launching the private beta or the service to meet a late summer timeline, he won’t be pinned down on timing for moving to public beta but said it probably will be early next year: “I don’t have a specific timetable in mind. ... We’ll go out when the service is ready. I would measure that in a few months.” Investment/M&A: Hulu is making official what’s been well known and confirmed for months—a $100 million investment from Providence Equity Partners. (We reported in May that NewCo hoped to sell as much as 10 percent for $100 million and a $1 billion valuation.) Kilar didn’t confirm the acquisition of Mojiti, the video annotation site founded by CTO Eric Feng; he did say that they’re “currently not evaluating any acquisitions.” Hulu.com: Destination portal hulu.com starts with thousands of invites to a private beta designed to test scale and provide dynamic feedback. Kilar describes it as “a technical beta, not a marketing beta ... We’re going to start in the thousands and ramp it up from there. We’ll grow it successively in coming days and weeks.” Feedback and suggestion options are threaded throughout the site, including the video player tools. Users can vote shows up or down, pop the player out of the browser for multitasking, share and embed video, see metadata. What hulu.com is not, Kilar says, is a user gen service: “That’s not our ambition, not our focus.” (I’ll have a first-look report after the service goes live.) Hulu distribution: Until the private beta opens up, most Hulu users are likely to enter through one of five major portals with reach to most of the U.S. broadband population: AOL, MSN, MySpace, Yahoo (NSDQ: YHOO) and Comcast’s Fancast. Hulu’s browser-based, home-cooked video player is skinned to match the look and feel of each partner’s portal. The service has been in testing for some time but publicly available content rolling out now. Kilar: “The look and feel is very different. We’re serving the video, serving the advertising.” Embedded content: In addition, even though Hulu.com is in private beta, embedded content posted by beta testers will be accessible to anyone. For instance, if I post the latest episode from Friday Night Lights or a clip from SNL here, you should be able to watch it without having direct access to the portal. Advertising: Launch advertisers include Cisco, Toyota, Nissan, General Motors and Intel. Where ever it’s being viewed, Hulu’s content is free and ad supported. Hulu’s advertising uses title cards and limited chapter breaks for TV episodes with fewer ads than the same show would have on TV, and follows existing chapters for feature films. Hulu uses overlays for clips; users can click on on an overlay in some cases, watch an ad while the video pauses, then can go back to the video. They can also ditch the ad after they start. Most shows will be single advertiser but some may not have enough ads. Kilar: “I’m not religious about it. I don’t want to be in a situation where the user has to watch the same ad again and again.” DVD sales: No electronic sell thru for now but Hulu will get a cut of any DVDs sold through hulu.com. Content: A mix of full-length episodes from current and library TV shows, clips and a small starter batch of feature films. Content from new shows should be up by the morning after they first run. Literally at the last minute this weekend, Hulu finalized deals with Sony ( NYSE: SNE ) Pictures Television and MGM Studios. More than 40 television shows from Sony will be available at hulu.com while MGM TV shows and feature films will be available through the Hulu service. (Sony owns Seinfeld but no word yet about its presence on Hulu.) What’s actually available also varies from show to show. For instance, NBC is providing the trailing five episodes of Heroes and only clips from other episodes while Fox is posting the full first season of veteran hit 24 and some full episodes from last season so people can get caught up before the new season launches. NBCU and News Corp. pledged early on to include prime-time programming from NBC and Fox and from their movie studios. Still no deal with CBS ( NYSE: CBS ) but 15 cable nets are contributing, including NBCU’s Bravo (no sign of Top Chef, Project Runway, etc.), SciFi and USA; several Fox nets including FX; and Comcast (NSDQ: CMCSA) nets including E and Versus. Also represented: indie online providers, Reveille Productions, Smithsonian Networks, and World Wrestling Entertainment.