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Is Hulu screwed?

September 20, 2007

Silicon Alley Insider claims that Hulu is screwed. In this article, they talk about online video economics and show why the NBC/News Corp joint venture is going to fail.

While I appreciate the analytical nature of the article, I’m skeptical about how bad of a move forming Hulu really is. The article doesn’t take into account a lot of strategic implications of the JV. While I don’t have time to run any sort of deep dive analysis, I’m sure there is a “fighting brand” element of Hulu which will benefit NBC and News Corp. Additionally, if Hulu focuses on longer-form TV content, it could develop a niche audience. And if the video category does blow up, capturing even a small piece of market share could be signficant enough to warrant the JV.

Also, online video is equivalent to the wild west right now. Nobody knows for sure what’s going to happen with advertising models or with consumer loyalties. Perhaps Hulu can create a better consumer experience than its competitors, or perhaps Hulu’s ability to leverage its relationship with NBC and News Corp, their original content, and their advertising relationships will prove to have bigger impacts than we think.  

Anyway, I don’t know the answer, but as Billy Walsh says, “I may not know if it sucks or not, but nobody else do either.” (or something like that).

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