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Hulu Dances With 850K Paying Subs

7/11/2011 12:01 AM Eastern

Hulu, which has put itself on the
block, had about 875,000 subscribers at the end
of June for its $7.99-per-month service — beating
the Internet video site’s expectations, according
to CEO Jason Kilar.

After adding more subs in June than in April
and May combined, Hulu expects to top more
than 1 million paying subscribers before the
end of the summer, Kilar wrote in a July 6 blog
post. The service now offers 15,000 hours of
content across devices with an installed base
of more than 100 million, he said.

“We have always believed that our path towards
creating a special company lay in our
ability to delight our customers,” Kilar wrote.

1M WITH FREEBIES

Including users that have a one-week free trial, Hulu
Plus already tops the 1 million mark. The site, backed by
NBCUniversal, News Corp., The Walt Disney Co. and
Providence Equity Partners, previously expected to
break the 1 million milestone later in 2011. Hulu officially
launched the subscription service in November 2010.

In recent weeks, Hulu has been widely reported to be
in discussions about selling itself with various parties,
including Google, Yahoo and Microsoft. Also looking at
Hulu are AT&T, Verizon and Amazon.com, AllThingsD
reported.

Disney CEO Bob Iger said Hulu’s owners are “committed
to selling,” speaking last week at the media conference
in Sun Valley, Idaho, Bloomberg News reported.

Kilar reiterated that Hulu is on pace to hit $500 million
in total revenue this year; he had previously said Hulu
Plus is expected to have a $200 million annual run rate
by the fall.

The Hulu CEO also discussed the economics of content
— but avoided criticizing the traditional TV business, except
to mention that Nielsen IAG measures Hulu’s video
advertising as being nearly twice
as effective as that of linear video
advertising services.

A Kilar post in February 2011
pointedly described TV as having
too many ads and failing to deliver
on consumer expectations, irritating
Hulu’s media-company
owners.

“The key to delighting content
owners rests in the economics,
and Hulu Plus is already revealing
our ability to compensate content
owners at the high end of the market
for a given body of content,”
Kilar wrote last week. “As Hulu
Plus increases in scale and scope,
we believe significantly more dollars in aggregate will
move to the content community than has historically
been the case in the industry.”

The number of TV series on Hulu Plus has more than
doubled, from 950 last November to 2,180 as of June,
which includes 76 series from Viacom networks like MTV,
Comedy Central, and VH1, Kilar said. He also noted that
Hulu serves nearly twice the number of video ads of the
next largest advertising service, according to comScore.

LIBRARY’S BULGING

Overall, the Hulu Plus content library increased from
9,000 hours last November to 15,000, while the total number
of full episodes on the service has more than doubled
from 13,000 to 28,000.

Hulu Plus also is aiming to become “available on every
Internet-connected device,” Kilar said.

In the second quarter, the service became available
on Xbox 360, select Android smartphones, TiVo Premiere
digital video recorders and select Samsung Blu-ray
Disc players. That’s in addition to PCs, Apple iPads and
iPhones, Microsoft Xbox 360, Sony PlayStation 3, Roku settops
and Sony and Vizio HDTVs and Blu-ray players.

September