Television

Tristan O'Carroll, mediaweek.co.uk, 19 May 2009, 07:30am

Hulu UK entry marked by ad sales disagreement

LONDON - The UK launch of Hulu, the online VoD service backed by News Corp, Disney and NBC Universal, is being hampered by an inability to secure UK content from Channel 4 and ITV owing to an ad sales disagreement.

Channel 4 VoD content Desperate Housewives

According to sources close to the situation, Hulu wants to retain control over ad sales around all, or at least, the vast majority of content on its yet-to-launch UK platform. However, Channel 4 and ITV have been unwilling to allow this.

Channel 4 struck a deal with YouTube in March to sell advertising around its own content on the Google-owned video-sharing site.

It is thought, however, that discussions are continuing, with all sides hopeful of a resolution.

Hulu, which also counts private equity investor Providence among its backers, insists it is making progress towards a possible UK launch and there is no suggestion that Hulu's UK plans are terminally damaged by the Channel 4 and ITV disagreement.

Once Hulu enters the UK, it will be hoping to capitalise on the opport-unity wrought by the demise of Project Kangaroo, the planned VoD service from BBC Worldwide, Channel 4 and ITV blocked from launch by the Competition Commission earlier this year.

Channel 4, Hulu and ITV declined to comment.

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All Comments

AdSalesGuy International - 20 May 2009

They are absolutely right to do this. If online video streaming of professional content is going to be as big as people think, then they must absolutely retain 100% sales control. Nothing will confuse the market more than having multiple sales points - and anyway, why have an intermediary? Book 100% of the sales.

This is Hulu's problem in the UK - they are simply an intermediary with no traffic. In the US, the content providers are the shareholders, so no problem. But in the UK, they simply get in the way. The broadcasters should work with Youtube, and other large or focused communities to distribute their content, and insist on owning the ad sales. It will keep rates up, it will keep the message clear, and the value IS the content - audience is easy to build when you have that sort of content. Plus they can add new audience development partners at will. Want more female viewers online of their content? Do a deal for female-focussed programming with iVillage. Want to promote your food shows? Work with the top food communities. The capability to grow specific audience demographics by doing deals with well-defined online vertical communities is a no-brainer, and will increase advertising response rates and perceived value. Why work with Hulu in the UK when there is Youtube? Makes no sense. Youtube can't sell ads very well - but the broadcasters can. No-one sells content quite like its producer.

In the absence of Kanagaroo, where the content owners = shareholders, they should all self-distribute and control ad sales.

Michael Crade - 20 May 2009

The above point raises the question, what is the use of Hulu outside of the US? What do they bring to the UK?

Technology? This is no competitive advantage. All the broadcasters are pretty good except for ITV who still insist on a Silverlight download.

Brand? Largely unknown outside media circles

Audience? starting from scratch

An ad sales expertise? The team doesn't exist, and as the poster above rightly says, the broadcasters would be fools to give up total control of the commercialisation of their content, and they already have their own ad sales teams - and talent can be bought in if they need improving.

The broadcasters' primary partner should be Youtube and broadcasters should control the commercial relationships. Youtube can effortlessly drive the audience streams broadcasters want and could simply create a design variation to keep professional content separate from UGC. Broadcasters would then have their own streams plus those generated by Youtube to sell - and I bet you a million that that would be more than Hulu could generate.

The stragey outlined by AdSalesGuy to work with proven communities to boost key audience demogs is an excellent one. You could even to work on limited-time partnerships that are commercially-driven - for example:. Ford could sponsor the online streams of a car show \(e.g. Fifth Gear), which is viewed on the broadcast channel \(five) and then is available on catch up on demandFive, Youtube, Autotrader, What Car and two or three other sites - just for the duration of the sponsorship.The Ad Sales proposition is broadcast + reach \(Youtube) + aligned interest \(car shows). You can't do this effectively if you don't control the ad sales and the player..

There should be a job going in each of the broadcaster's online units to do these deals, and keep them short term, results-focused and commercially driven.