21st century fox
The popularity of News Limited's cutting edge online video distribution business, Hulu, is exceeding all expectations. With the company yet to iron out international partnerships, a huge opportunity looms for a local media outlet.
Who will be the first Australian group to pick up the phone to News Corp's Peter Chernin and do a deal to be part of the fastest growing internet business – free Hollywood films and TV shows?
It sounds like a dumb question when we know that truly high speed broadband in Australia using fibre-to-the-node is probably five years away, if not longer.
But video distribution online is becoming so pervasive, even with the relatively slow ADSL2 connections, that it seems to be having an impact on the current performance and future prospects of the already troubled free-to-air TV stations.
The Hollywood movie studios have already woken up to the fact that if they don't put their content online someone else will. The game is rapidly changing from walled garden to open access, notwithstanding the various legal efforts by the studios to protect their copyright.
At News Corp, Chernin has tied a good chunk of his reputation as a media visionary to the success or failure of a business he started in March this year in partnership with NBC Universal called Hulu.
Chernin and NBC Universal chief Jeff Zucker, who made his name as executive producer of mainstream TV shows, have created a company that is now one of the top five video sites in the US. It doubled its unique visitors to 5.34 million between October and November according to comScore. The site has this year streamed about 140 million videos according to data from Neilsen.
Hulu has a vintage internet business model – free content paid for by advertising. It is not too different from a free to air TV station, except the ad minutes per hour are about half what you find on US TV.
It started in March with 250 TV shows and 100 movies, according to an article in the October issue of Wired magazine. Wired described Hulu as "the sleekest, easiest-to-use, most professional video site on the internet”.
Hulu's primary source of content was initially News Corp and NBC Universal. It has since stitched up deals with 110 content partners including Sony Pictures.
Well informed blogger Michael Arrington from TechCrunch has tipped that Hulu will generate $70 million in revenue in its first year, about 75 per cent of which will go to the content providers.
It could not be making a profit, but it looks to have a more sustainable business model than other popular video sites such as Google's YouTube. Advertisers are wary of YouTube because of the difficulty matching ads with appropriate content.
Hulu is one of many online video sites capturing the eyeballs of the 60 million Americans with high speed broadband.
Google's list of the ten most popular search terms in the US for 2008 includes three sites offering free video content or links to fee video content. The top 10 search terms in 2008 according to the Google Zeitgeist were: obama, facebook, att, iphone, youtube, fox news, palin, beijing 2008, david cook and surf the channel.
SurfTheChannel was established a year ago with the aim of indexing "all videos, everywhere" and listing them in easy to navigate pages. It had about 153 million page views in September.
As a private company its advertising revenue has not been disclosed. But it has signed agreements with several broadcasters and one movie studio to link to their content although it says that due to confidentiality reasons it cannot disclose the names of the companies it is working with.
Hulu is one of the most popular sites that SurfTheChannel links to. But it is currently off limits for Australian domiciled internet users.
If you try and connect you will get a message saying Hulu is in the throes of negotiating international streaming rights. "If you'd like, please leave us your email address and the region in which you live, and we will email you when our videos are available in your area,” the message says.
The negotiation of international streaming rights will be incredible complex. Substantial content is locked up in local licensing deals with the free to air stations and Foxtel. But Hulu has found that material that no one was watching except on niche cable channels has proved very popular when made available for free online.
The hiatus over streaming rights presents an ideal opportunity for a savvy Australian media group to talk to Chernin about local rights for the Hulu business.
The most obvious potential candidates are companies that have the existing broadband customers and experience in online video distribution. The list would include Telstra's BigPond internet business, PBL's ninemsn, Optus and the emerging internet service provider iiNet.
Of all the possible contenders to partner with Hulu, Sol Trujillo at Telstra is the most obvious choice. The vision put forward by Chernin is in keeping with Trujillo's vision for Telstra as a media comms company.
Trujillo has the financial strength to invest in Hulu should it need additional funds. At the moment Hulu's primary financier is Providence Equity Partners. Trujillo has more than half the broadband users in Australia and picks up more than half of new subscribers.
As well, for at least the next five years while we wait for the NBN, Trujillo has the country's best broadband infrastructure.
It sounds like a dumb question when we know that truly high speed broadband in Australia using fibre-to-the-node is probably five years away, if not longer.
But video distribution online is becoming so pervasive, even with the relatively slow ADSL2 connections, that it seems to be having an impact on the current performance and future prospects of the already troubled free-to-air TV stations.
The Hollywood movie studios have already woken up to the fact that if they don't put their content online someone else will. The game is rapidly changing from walled garden to open access, notwithstanding the various legal efforts by the studios to protect their copyright.
At News Corp, Chernin has tied a good chunk of his reputation as a media visionary to the success or failure of a business he started in March this year in partnership with NBC Universal called Hulu.
Chernin and NBC Universal chief Jeff Zucker, who made his name as executive producer of mainstream TV shows, have created a company that is now one of the top five video sites in the US. It doubled its unique visitors to 5.34 million between October and November according to comScore. The site has this year streamed about 140 million videos according to data from Neilsen.
Hulu has a vintage internet business model – free content paid for by advertising. It is not too different from a free to air TV station, except the ad minutes per hour are about half what you find on US TV.
It started in March with 250 TV shows and 100 movies, according to an article in the October issue of Wired magazine. Wired described Hulu as "the sleekest, easiest-to-use, most professional video site on the internet”.
Hulu's primary source of content was initially News Corp and NBC Universal. It has since stitched up deals with 110 content partners including Sony Pictures.
Well informed blogger Michael Arrington from TechCrunch has tipped that Hulu will generate $70 million in revenue in its first year, about 75 per cent of which will go to the content providers.
It could not be making a profit, but it looks to have a more sustainable business model than other popular video sites such as Google's YouTube. Advertisers are wary of YouTube because of the difficulty matching ads with appropriate content.
Hulu is one of many online video sites capturing the eyeballs of the 60 million Americans with high speed broadband.
Google's list of the ten most popular search terms in the US for 2008 includes three sites offering free video content or links to fee video content. The top 10 search terms in 2008 according to the Google Zeitgeist were: obama, facebook, att, iphone, youtube, fox news, palin, beijing 2008, david cook and surf the channel.
SurfTheChannel was established a year ago with the aim of indexing "all videos, everywhere" and listing them in easy to navigate pages. It had about 153 million page views in September.
As a private company its advertising revenue has not been disclosed. But it has signed agreements with several broadcasters and one movie studio to link to their content although it says that due to confidentiality reasons it cannot disclose the names of the companies it is working with.
Hulu is one of the most popular sites that SurfTheChannel links to. But it is currently off limits for Australian domiciled internet users.
If you try and connect you will get a message saying Hulu is in the throes of negotiating international streaming rights. "If you'd like, please leave us your email address and the region in which you live, and we will email you when our videos are available in your area,” the message says.
The negotiation of international streaming rights will be incredible complex. Substantial content is locked up in local licensing deals with the free to air stations and Foxtel. But Hulu has found that material that no one was watching except on niche cable channels has proved very popular when made available for free online.
The hiatus over streaming rights presents an ideal opportunity for a savvy Australian media group to talk to Chernin about local rights for the Hulu business.
The most obvious potential candidates are companies that have the existing broadband customers and experience in online video distribution. The list would include Telstra's BigPond internet business, PBL's ninemsn, Optus and the emerging internet service provider iiNet.
Of all the possible contenders to partner with Hulu, Sol Trujillo at Telstra is the most obvious choice. The vision put forward by Chernin is in keeping with Trujillo's vision for Telstra as a media comms company.
Trujillo has the financial strength to invest in Hulu should it need additional funds. At the moment Hulu's primary financier is Providence Equity Partners. Trujillo has more than half the broadband users in Australia and picks up more than half of new subscribers.
As well, for at least the next five years while we wait for the NBN, Trujillo has the country's best broadband infrastructure.
Share this article and show your support
Call 1300 880 160
Start a chat
Schedule a call
