Hulu vs. Lulu: NBC, Fox to Launch Online Video Site
Posted October 29, 2007
LOS ANGELES — NBC and Fox are set to launch an advertising-supported online video site that hosts programming from varied entertainment companies in a bid to seize viewers from Google Inc.'s YouTube, the broadcasters said.
A test version of the site, Hulu.com, goes online Monday, with plans to premiere a final version in a few months, company officials said.
The site, developed by News Corp. and NBC Universal, a unit of General Electric Co., offers free viewing of full-length films and TV episodes, supported by advertising.
North Carolina-based Lulu.com, a self-publishing site, has tried to stop the Hulu project, seeking a restraining order in federal court. Lulu claimed Hulu infringes on its name. A judge in Raleigh dismissed the challenge earlier this month. Lulu.com is owned by Red Hat software co-founder Bob Young.
Young, whose company is based in Morrisville, has said he will continue to fight the Hulu name. Lulu works with artists to publish books, music, artwork and videos.
Lulu, which also has a TV site, has been used by people in more than 80 countries. Collectively they have published more than 100,000 works with about 2,500 more added per week.
Hulu will host programming from the two networks, as well as TV shows and films from Sony Corp. and Metro-Goldwyn-Mayer Inc.
"Consumers identify with shows and films," rather than networks, Hulu chief executive Jason Kilar said. "When you aggregate great content together, it makes things easier for the user."
Hulu's debut comes amid tensions between entertainment companies and popular online video sites, such as YouTube, where unauthorized clips from shows often appear.
Viacom Inc., which owns Comedy Central, MTV, VH1 and many other cable channels, is suing YouTube for $1 billion, claiming massive copyright infringement of clips from popular shows, including "The Daily Show with Jon Stewart." YouTube has said it follows copyright laws by removing protected video upon request.
Hulu will legally offer hundreds of episodes of current shows such as NBC's "30 Rock" and Fox's "The Simpsons," as well as older shows such as "Lou Grant" and "Lost in Space."
Its movie offerings will consist of films that have already been edited for television broadcast and will contain short ads online in the places where they would appear on TV.
The shows will be available at Hulu.com, as well as on distribution partner Web sites such as AOL, MSN, MySpace, Yahoo and Comcast.
It will also provide viewers with tools that let them embed full episodes on their own blogs, Web sites or personal profile pages. Users would also be able to select short clips from shows, such as Jay Leno's monologue on "The Tonight Show," and e-mail a link to the content to friends.
The services give Web users unprecedented flexibility to legally republish copyright content, observers said.
"The technology they've put together on this short notice is not only adequate, it's also better than most of what else is out there," said James McQuivey, a TV and media technology analyst for Forrester Research. "I think they have moved a couple of steps forward compared to their competitors in the industry."
Hulu will offer some premium content not available on NBC or Fox's own Web sites in a move at odds with some other networks that have tried to direct viewers to their own online content.
Walt Disney Co.'s ABC, for instance, sells downloads of its shows on Apple Inc.'s iTunes but streams free episodes mainly on ABC.com.
McQuivey said Hulu's model could be preferable to advertisers, who generally favor strategies that make popular content widely available.
"Advertisers want more opportunity to put ads next to prime-time hit shows," he said. "If they had kept the content on NBC.com or Fox.com, it would have limited the number of people who would see it."
But McQuivey said Hulu faces a number of challenges, such as the expense of hosting content and delivering it to a potential audience of millions.
Those expenses will only grow as the site finds itself having to offer content in high definition to make it look better on large-screen televisions, McQuivey said.