Advertising works for Hulu, kind of

March 25, 2009

The jury is out on whether advertising will ever work for online video sites as they strive to become real profit-generating businesses. Well, it’s worked for Hulu, but not in the profit-generating kind of way — at least not right away.

Hulu jumped to become the fourth most-watched video site in the United States last month thanks to a major advertising spot during the Super Bowl, according to Internet audience measurement firm comScore in this Reuters story. Those spots featured Alec Baldwin telling viewers about Hulu’s “evil plot to destroy the world” by turning people’s brains to mush.

Comscore said Hulu’s viewership grew 42 percent to 34.7 million unique visitors watching around 333 million videos.

The irony of Hulu’s “ratings” success on the back of a TV advertisement during one of the most watched events on the planet is not lost on us. Like many other Web video sites Hulu isn’t quite bringing in millions of dollars in profits for its owners yet, but this might be a start.

Google’s YouTube is also on the hunt for revenues and profits to match its huge popularity. We’re not sure if advertising on national television will help as it already has three times the number of viewers that Hulu does. YouTube’s issues might have more do with the reluctance of mainstream advertisers to make major commitments to advertising on its site which is dominated by user-generated clips rather than professionally made ones. Hulu, which only features TV shows and archive movies, has had more success with advertisers.

Even if YouTube decided to advertise during the Super Bowl, it might not have the same return on investment. As the New York Times explains here, Hulu paid next to nothing for Super Bowl ad spots worth nearly $3 million as this year’s football extravaganza was broadcast by part owner NBC.

Keep an eye on:

  • MySpace, BT to offer Web contract domains to users (Reuters)
  • Investor supports Comcast’s buyback strategy (NY Post)
  • Houston Chronicle cuts 12 percent of staff (Reuters)

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I started watching hulu when it was still in beta. Over the past year its programing has improved dramatically. I do not even mind the commercials since I am getting the service for free to watch at my convience. Many of the commercials are by far better than the average fare we see on regular TV. (I realize that some are same on both.) In many ways it feels like the old days of TV with an hour long program lasted 55 minutes instead of 43 minutes. Finally, I have also discovered that I can watch hulu programs on an older model CRT 36 inch television (using an S3 video connection to my computer) that actually gives me a better picture than my local cable.

Posted by bob101 | Report as abusive

Hulu rocks and that’s the simplest way of putting it. I used to think about getting dvr but rethought it after seeing all the available programs on Hulu. It would be even cooler if it would run off the iPhone.

Posted by MIke | Report as abusive