Hulu to Hurt Cable, Not Google

It will host programming from NBC and News Corp.'s Fox Broadcasting, as well as TV shows and films from Sony Corp. (SNE) and Metro-Goldwyn-Mayer.

The shows will be available at Hulu.com, as well as on distribution partner sites such as Time Warner's (TWX) AOL, Microsoft's (MSFT) MSN, News Corp.'s MySpace, Yahoo! (YHOO) and Comcast (CMCSA).

While networks such as CBS (CBS) have successfully offered their shows on the Web, Hulu will provide a one-stop shop for advertisers to invest online around hit TV shows, and it won't suffer from the same content limitations that face a single network.

Still, Sinnreich says Hulu is likely to suffer from the technological limitations that weigh on many of the online efforts launched by major media conglomerates.

"Content owners tend to be more security conscious from a tech standpoint than neutral third-party media companies like YouTube, and because of that, their stuff tends not to work as well," says Sinnreich. "It's often clunkier, more flooded with annoying advertising and more prohibitive, which is bad for the user experience."

He compares Hulu to Motherload, the Viacom site where users can watch Comedy Central clips.

"It's more an extension of the brand and distribution channels that we see on traditional television or cable networks," he says.

Meanwhile, McQuivey says major cable operators such as Time Warner Cable (TWC) and Cablevision (CVC), as well as satellite service providers like DirecTV (DTV) and EchoStar (DISH) will be watching Hulu's launch with trepidation, because it represents the beginning of an inevitable shift to watching TV on the Internet.

"Cable companies are being targeted by this," says McQuivey. "Satellite is already under threat by digital cable. They don't have nearly the on-demand capability that cable and certainly the Internet can provide, so I've already written them off."

For its part, Comcast is a distribution partner for Hulu. A spokesman for the company could not be reached to comment on its role in the venture.

"Comcast will have a front-row seat to gauge the threat of stuff like this to its cable service," says McQuivey. "They want to deliver online video, because they know that if they don't, someone else will."

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