Despite a huge surge in online viewers, Hulu has been unable to convert its popularity into profitability, with one analyst estimating that 40 percent of its ad inventory is being used for public service announcements. In an interview with Business Week magazine, Arash Amel, who covers digital entertainment content for Britain's Screen Digest trade publication, said that he has revised his prediction that Hulu would generate $180 million in spending this year. He now estimates that the amount will be about $120 million. "What we've seen is rapid growth in consumption, but the advertising isn't keeping up," he commented. While online advertising offers numerous benefits that TV advertising alone cannot -- it can target certain groups and offer online elements -- those benefits are being disregarded in the current economic crisis. "Right now advertisers are trying to cut back anywhere they can," Jason Blackwell, an analyst at ABI Research, told Business Week . "So unproven models like Hulu are usually the first things to go." Moreover, the magazine observed, as the popularity of Hulu grows, so too does concern by its principal owners, NBC and Fox, that it is cannibalizing their TV audiences and have begun limiting the number of shows being offered. As Brahm Eiley, head of Convergence Consulting, told Business Week "They don't put everything they have online because they don't want to kill their cash cow, which is television."

31/03/2009