According to a report in Advertising Age, News Corp., one of the major investors in Hulu and the owner of the Fox television network, is looking at ways to sell more digital advertising across all platforms. Those platforms would include not just Fox.com, but also Hulu.
Right now, Hulu sells most of its own advertising inventory. Networks, like Fox, are responsible for a smaller percentage of ads and often package these online deals as an incentive in exchange for a larger traditional TV buy. Traditional media buys continue to decline and thus far, online ads — especially for video — don’t even come close to matching their offline counterparts.
As traditional television ownership declines, it is essential for networks to address online video advertising in a big way. Ad Age cites the success that the CW network has had in online advertising. Despite upping its ad count at CWTV.com for the 2010-2011 TV season — unique viewers were up 55% season to date — users watched more online content, and 94% of ads in full episodes were watched to completion.
One of the early value plays of Hulu, especially when it first debuted, was that it contained fewer advertisements than traditional TV. Networks, content providers and Hulu itself have been reticent to increase advertising on the site, in fear of a user revolt.
A Market Inevitability
Still, we think that ultimately, more advertising will shift to Hulu and other online content providers. Frankly, it should. When Hulu first debuted, it was seen by early adopters as an alternative to torrenting TV shows or waiting for a DVD release. Four years later, Hulu’s value proposition and its role with consumers has changed.
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