Hulu's Profits aren't Huge

Hulu's going to earn around $90 million its first year, but net of paying out its content partners, it'll only have around 12-25 million left over. Not bad for a startup, the article says, but not huge either. The article talks about the challenges Hulu faces. This little paragraph, though, was quite revealing. I'm left thinking that given the competition from bittorrent, refusing to release your content to things like Hulu just can't be a longrun equilibrium.

The problem with Hulu really has nothing to do with its design - sleek and easy to use - the problem is the tight stranglehold networks still have over their content. Major networks CBS and Disney (ABC) are not even on board yet and the networks that have joined yank their content down after it's five weeks old.

Instead of offering an online site that competes, not just with television, but also with our trusty DVRs that can record and save every episode of a show, Hulu only offers a smattering of hit-or-miss content where you're not even guaranteed to find the one episode you came to the site in search of in the first place. Case in point: Family Guy's "Blue Harvest" episode, a Star Wars parody, became so popular that it's been released as a standalone DVD. Even though having that episode alone could drive scores of visitors to Hulu's site, it's nowhere to be found. But do you know where it can be found in a matter of minutes? BitTorrent.

So, Hulu loses to the pirates when it comes to content and it can't even compete when it comes to offering a legal alternative to watching TV online either, since other networks don't want to participate, happy to host their streaming content on their own web sites or - in the case of some smaller networks - not at all.