The Launch of Hulu Signals a New Phase in the Broadband Video Market; but Risks Exist for Large TV Networks in an Online World

Monday, November 5th, 2007 
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NEW YORK — Recent news concerning NBC and News Corporation’s Hulu joint-venture includes the launch of its recent site in beta mode, signaling that the broadband video market has entered into a new phase.

During initial phases of the broadband video market, TV networks would partner with key video aggregation sites to offer limited amounts of content online. Hulu – a destination site and a content syndication network for NBC Universal and News Corp’s video content – now suggests a larger shift to a market where large content owners dictate terms and garner larger portions of the overall revenue associated with these shows.

“ABI Research believes that while content aggregators will continue to play an important role in this space, control for premium TV content distribution will shift back to the networks, as they create their own syndication networks for these shows on the Internet,” says Michael Wolf, research director. “As online audiences grow, networks realize that the Internet is an important distribution medium for content both in its original broadcast form and in new ways which take advantage of the interactive nature of IP-based video distribution.”

While online distribution networks like Hulu and CBS Interactive Audience Network will play an essential role in online distribution for professionally produced TV content, ABI Research believes that much of the overall market remains out of the control of traditional broadcast television stakeholders.

User-generated content creates a new method for talent to side-step traditional network structures in the broadcast world and to reach wide audiences – while new time- and place-shifting technologies place more power into the hands of patrons with respect to consuming video.

“We see accelerating shifts in how consumers absorb video content,” Wolf continues. “Empowered consumers are choosing the time and place to watch video, and are presented with a host of new viewing options outside of the traditional linear broadcast model.”

“Although ABI Research believes professional TV content will continue to be a staple in a consumer’s video diet, we foresee a teasing appetite for video entertainment by way of new sources and diverse mediums.”

Broadband Video and Internet TV examines every aspect of the online video market including consumer adoption of Internet video and the back-end enabling service providers in the BBV ASP, CDN, and ad-network markets.

It forms part of three ABI Research Services: Digital Media, Home Networking, and Multi-Channel Video.