If you love watching TV shows on Hulu but don’t have a cable subscription, things could get a bit more complicated in the near future. According to the New York Post, Hulu could soon start requiring its users to prove that they also have a cable or satellite subscription. This would obviously turn Hulu’s current business model on its head. It’s not clear how many of the service’s 31 million users currently don’t subscribe to cable TV, but chances are that the service’s audience would shrink after this move.

Keep in mind, this is just a rumor for now, but it’s definitely worth keeping an eye on. It’s also not clear if this subscription requirement – assuming it is actually going to happen – will just apply to Hulu’s free service, or if it will also apply to Hulu Plus subscribers. Hulu Plus, which costs $7.99 per month, currently has somewhere between 1.5 and 2 million paying subscribers.

Update: We just talked to a source close to Hulu. According to our source, Hulu and its content providers have talked about this move toward authentication since 2009. Our source noted that Hulu has no interest in being a first mover here and that a requirement for authentication is likely still a few years out. Hulu, however, does want to be a good partner and may have to give in to its partners’ pressure soon or later. Even though an authentication requirement isn’t likely to happen right away, though, our source notes that what could happen relatively soon is that the content providers could require longer delays before their shows become available on the service for non-subscribers. Cable subscribers, under this model, would get access to a show on Hulu the next day, while non-subscribers would have to wait at least 30 days. This model would likely also apply to Hulu Plus subscribers.

As our own Alexia Tsotsis noted last year when the FCC gave the go-ahead for the Comcast-NBC merger, it issued a number of specific rules to ensure that this merger wouldn’t influence Hulu’s operations. These rules, however, did not specifically touch upon any future provisions that would tie access to Hulu to a cable subscription.

NBCUniversal, News Corporation, The Walt Disney Company and Providence Equity Partners currently share ownership of Hulu. There have been persistent rumors that Providence Equity Partners is looking to sell its stake in the company to the rest of the owners, though. The New York Post’s Claire Atkinson argues that this move toward an authentication model is one of the main reasons why Providence Equity Partners is trying to sell its stake in the company.

We asked Hulu for a comment about these rumors and will update the story once/if we hear more.

One group that has already commented on these rumors is Public Knowledge, a group that works to “preserve the openness of the Internet” and promotes “creativity through balanced copyright.” In a statement, the group’s president and CEO Gigi B. Sohn writes that “restricting access to legal content will only drive consumers to find illegal content. In particular, we are concerned about restricting access to TV programming available over free over-the-air broadcasting. It should be available online, regardless whether anyone subscribes to cable or satellite TV. By putting more restrictions on consumer access to popular content, the entertainment industry only removes any justification for stronger ‘anti-piracy’ laws it is perpetually seeking from Congress.”

Hulu has been having a busy week. On Tuesday, the company announced a new deal for advertisers, which now charges them only for ad completions, and today at Hulu’s upfronts, the company announced the arrival of even more original shows.

We already knew of several of the programs Hulu discussed this morning, including “Battleground,” “Up to Speed,” and “A Day in the Life,” for example. But this morning, the company revealed several more additions, including “We Got Next,” “The Awesomes,” “Don’t Quit Your Daydream,” and “Flow.”

That Hulu is growing into original programming has been known for some time. Although a story in this week’s NYT brought new attention to the TV streaming service, Hulu had first announced “Battleground,” a scripted political comedy, back in January, as the first show to kick off its then growing lineup of original series.

Today, Hulu revealed several more additions to that lineup. It’s notable that there are even some bigger name stars participating this time, including SNL’s Seth Meyers and Michael Shoemaker, for example, as well as HBO’s Entourage lead Adrian Grenier.

Descriptions and details below:

• We Got Next (2012): Four unlikely friends butt heads on the pick-up basketball court and on the sidelines of everyday life. Starring: Kenya Barris (THE GAME, ARE WE THERE YET?, AMERICA’S NEXT TOP MODEL), Hale Rothstein (THE GAME, EVERYBODY HATES CHRIS), Danny Leiner (THE OFFICE, MODERN FAMILY, ARRESTED DEVELOPMENT, FREAKS AND GEEKS, HAROLD & KUMAR GO TO WHITE CASTLE, DUDE WHERE’S MY CAR?
• The Awesomes (2013): An unassuming superhero and his cohorts battle diabolical villains, the ever-present paparazzi, and a less-than-ideal reputation as second-class crime fighters. Starring: Seth Meyers (SATURDAY NIGHT LIVE), Michael Shoemaker (SATURDAY NIGHT LIVE, LATE NIGHT WITH JIMMY FALLON) and animation studio Bento Box (BOB’S BURGERS, ALLEN GREGORY).
• Don’t Quit Your Daydream: A cast of famous musicians travel across America in search of could-have-been musical artists to collaborate on a new song giving them a second-chance at stardom. Based on an award-winning documentary by Adrian Grenier and John Loar. Starring: Adrian Grenier; Produced by Virgin
• Flow: When Ed Dante, a hard-working kid from the wrong side of the tracks is framed for a crime he didn’t commit, he begins an epic quest to deliver true justice. To achieve his goal, he must discover the mysteries of an ancient art, uncover hidden worlds and become a hero to a generation. Starring: Michael “Dooma” Wendschuh (show creator, co-founder and president of sekretagent studios: ASSASSIN’S CREED II (2009), ARMY OF TWO (2008), ASSASSIN’S CREED (2007); David Belle (Founder of Parkour); Produced by Agility Studios (producers of The LXD) and the Shine Group (WHO KNEW? IT’S EVERYBODY’S BUSINESS, APPETITE FOR LIFE)

Hulu also revealed many of its numbers to the advertisers in attendance, although much of this has already been reported. The company again noted that it has 2 million paying subscribers and saw $420 million in revenue last year.

There are now over 360 content partners on Hulu and its premium offering, Hulu Plus, and the service offers over 40,000 hours of content. This includes over 50,000 full TV episodes and nearly 1,900 TV series.

The company also said that it has now served over 1,000 brand advertisers to date, and, citing comScore metrics, claimed to be #1 in video ads delivered per month, #2 in content streams, #2 in total content video and #3 in minutes-per-viewers. Excluding ad networks, Hulu says it ranks #9 in unique viewers for total videos. Hulu also said it represented 20% of the online video marketplace, and 40% of the premium video marketplace.

In February, users watched 2.5 billion videos on the service, which Hulu jazzed up by saying that’s like “1,000 videos a second.”

Hulu CEO Jason Kilar had previously said that the company would be spending over $500 million this year on licensing new content and creating original shows, which he felt would be important in order to better compete with service like Netflix, Amazon, and Apple.

Netflix especially has been aggressively growing its library this year with additions which include original shows “Lilyhammer” and “House of Cards,” for example, plus resurrections of fan favorites like “Arrested Development.”

This morning, at the Ad Age Digital Conference in NYC, Hulu CEO Jason Kilar announced a significant change in how the media company will charge its advertisers. Going forward, advertisers will only be charged based on a 100% completion rate. In other words, if viewers don’t watch the whole ad, it doesn’t count.

The change will be effective in both the free level of service and the subscription offering, Hulu Plus.

The new feature had already been in beta testing with companies including General Mills, Zenith Media, and Horizon Media, all of whom, predictably, touted the move a big step in the right direction.

AdAge cites Hulu’s current ad completion rate at 96% – a lot higher than the average of 81% for long-form content and 59% for short-form content. They also note that the change could bring increased rates from competition for the fewer spots available going forward.

According to Hulu SVP of Advertising, JP Colaco, the 100% completion rate for advertisers is just one of several ways the company has been trying to work closely with the ad community. Writing for the official Hulu blog, Colaco also cited older ad products like the Hulu Ad Selector launched in 2007, which allows viewers to choose among multiple ads to select the one most relevant to them. More recently, the company introduced Hulu Ad Swap, which allows viewers to substitute out the ad they are watching for one that they feel is more relevant to them. Hulu Ad Swap now has been used over 9 million times.

Hulu also announced today that the service has now passed over 2 million paid subscribers in Q1 of this year, which Colaco says is faster than any other video subscription service, online or off, in the U.S.

According to metrics from comScore, Hulu now has around 38 million visitors a month, and revenue of $420 million in 2011, up 60% from $263 million in 2010.

For comparison’s sake, as of the beginning of this year, Netflix was doing nearly twice as much revenue in a quarter as Hulu did in a year.

Although Hulu owners were shopping the service around last summer, the company has been moving forward, most recently with the introduction of original content. The service now offers series like the political comedy “Battleground,” a reality show from documentary filmmaker Morgan Spurlock “A Day in the Life,” and later this summer, “Up to Speed,” a travel series from “Dazed and Confused” and “Slacker” director Richard Linklater will arrive.

In January, the company said it would invest $500 million in content for 2012.

When I first saw the pitch for Splitflix over the weekend I guffawed a little into my bourbon. The site purports to allow you to “share” your Netflix or Hulu account with a random stranger using a P2P matching system. You and the other person pay half of the cost of the subscription and then enjoy your cheaper streaming accounts.

However, after a bit of digging, as a product it seems solid and as an act of protest, however misguided, it’s sure to get at least a little bit of attention. It’s even technically OK – or at least not prohibited – in the Netflix terms of service:

And Hulu didn’t mention password sharing.

To be clear, I don’t think this is a good idea. I think Hulu and Netflix will find some way to stop it and the possibility that two strangers would share an account without driving each other crazy with movie choices is slim to none. Even if we don’t have to watch the same thing, I’d still go nuts if all I saw were Van Damme flicks in my shared Recently Watched list. I could also foresee a situation where one member of team Splitfix stops paying, but the damage would be limited in that case. You’re also going to be limited in what you do with the site later as I suspect a sale is out of the question.

As a money saving opportunity I applaud Splitflix for giving this a shot. The site is in beta now so there’s no way to “test” it at the moment. There was some talk this summer about cracking down on shared Netflix streams but our anecdotal tests of Netflix and Hulu allowed at least two devices to stream at the same time. It doesn’t seem totally legit, like that picture of the dark overpass with the phrase “Free Hugs” spray-painted on the concrete. But maybe – just maybe – those hugs will be real.

The folks over at Hulu originally promised Wii users would have access to their Hulu Plus streaming service by the end of 2011, but things didn’t exactly pan out the way they had hoped.

Well, after a few extra months of waiting, the Nintendo-faithful are finally being rewarded for their patience: the Hulu Plus app can be downloaded from the Wii Shop Channel. The app itself is free, but actually using it will cost users the standard $7.99/month.

While I’m glad Hulu finally managed to make good on their word, their work isn’t over yet. 3DS owners are still patiently waiting for their chance to stream back episodes of The New Girl, and let’s not forget that Nintendo has been hard at work on the forthcoming Wii U console for months now. With any luck streaming content providers like Netflix and Hulu can quickly adapt to that new multi-screen paradigm.

After all, what better way is there to revel in togetherness than for two people to watch two completely separate video streams at the same time?

Joking aside, it’s heartening to see Nintendo get serious about streaming content so late into the Wii’s lifespan. As their hardware prices drop (and you can bet that the Wii will sink below $150 at some point), the Wii could eventually find itself competing with other low-cost streaming devices like the Roku 2 series. While the Wii would come up short up in terms of PC connectivity, its decent web browser and support for services like Hulu and Netflix could bolster its adoption into even more non-gamer households.

The 2012 Super Bowl has come and gone, while you’re left to clean up the beer cans, wash off that face paint, and get back to planning your next pivot. The game itself provided more than enough excitement, with the New York Football Giants eking out a win over the star-crossed Tom Bradys and Bill Belichicks. This year’s Big Game also marked the first time that a Super Bowl was streamed live, legally, and for free on the Interwebs. While online viewers met with a number of shortcomings, the streaming was — for the most part — a success. (Read our review here.)

The Super Bowl also proved to yet again be the catalyst of rabid activity on social media channels, especially Twitter, which, at its most active, saw more than 10,000 tweets per second. A record for sporting events (even though this record seems to be broken every three months.)

While some watch the Super Bowl for their love of a good game of pigskin, others flip on the game for the halftime entertainment or the slew of “creative” commercials airing for the first time in front of a ready-made audience of millions.

The ad content this year left much to be desired (in my humble opinion), though there were some highlights, like an appearance by some faces familiar to the tech industry, thanks to Best Buy’s spotlighting of a few mobile innovators, among them Philippe Kahn, Ray Kurzweil, Instagram Founder Kevin Systrom, and the guys behind Shazam, and Words With Friends, and so on.

Of course, in the wrap up of every Super Bowl, the people want to get a taste of which commercials were the most popular. This morning Hulu released its list of winners, and it looks like nostalgia took the blue ribbon. Of the ads that ran during game time, Honda’s “Matthew’s Day Off” (a Ferris Bueller tribute) just narrowly edged out Volkswagen’s “The Dog Strikes Back,” with the “most liked” ad on Hulu AdZone being Volkswagen’s “The Bark Side” preview ad.

Below, you can find the top results across categories, including “Overall Most Liked Ads” and “Funniest Ads.” For more of Hulu’s categories, check out their release here.

Overall Most Liked Ads

1. Volkswagen: The Bark Side Teaser
2. Honda: Matthew’s Day Off — Extended
3. Volkswagen: The Dog Strikes Back
4. Skechers: GOrun Mr. Quiggly
5. Dannon Oikos: The Tease
6. Chevrolet: 2012
7. M&M’s: It’s That Kind of Party
8. Audi: Vampire Party
9. E*Trade: Fatherhood
10. Acura: Transactions — Extended

Funniest Ads

1. Acura: Transactions
2. Hulu Plus: Hulubratory
3. Chevrolet: Happy Grad
4. Honda: Matthew’s Day Off
5. Chevrolet: 2012

Of course, Hulu is not the only service/company to track this year’s most popular commercials. This morning, TiVo also shared it’s commercial results, which is of note as it claims to be the “only second-by-second audience research service to rank the top ten commercials based on actual commercial retention and viewership” relative to the Super Bowl’s viewership numbers. Interestingly, while many brands like to preview or tease their ads days before the Super Bowl actually airs, the top three did not preview their commercials online before the big game. Take that, Internet?

Though it may not come as a surprise, it’s disappointing not to see many tech companies (or tech-related ads) in either of these top ten lists, with the exception of Hulu and E*Trade. It seems that the Super Bowl came and went without the same controversy (or negative reaction) stirred up by GoDaddy, Salesforce.com, and Groupon last year, the former two ranking high in the “Most Disliked” category last year.

But, without further ado, here are the top ten according to TiVo:

1. Doritos: “Man’s Best Friend”
2. M&Ms: “Ms. Brown”
3. Doritos: “Sling Baby”
4. Pepsi: “King’s Court”
5. Volkswagen: “The Dog Strikes Back”
6. NFL New Fantasy Game: “Win a Million Bucks”
7. Acura NSX: “Seinfeld”
8. FIAT 500: “Supermodel”
9. Chevy Camaro: “Happy Grad”
10. E*Trade Baby: “Fatherhood”

What do you think? Weigh in with your favorites.

Addendum: For those paying attention, Yottaa has done a wrap up of all the which sites went down during the Super Bowl ad blitz. Coke took a hit, as did Acura and Act of Valor. Check out their blog post here.

Hulu is launching its first-ever original scripted series with its 13-episode order of Battleground, a political comedy following the campaign trail of a third-place candidate in Wisconsin angling for a seat in the Senate.

The show is kicking off Hulu’s foray into scripted programming, and will be followed by two other original shows: a second season of documentarian Morgan Spurlock’s A Day in the Life series, and Up to Speed, a travel show from Dazed and Confused director Richard Linklater.

Battleground will debut on February 14th, Hulu says, and will be available to all users of Hulu’s free service and its paying customers on the premium version. The company also told Bloomberg that it’s planning to raise money to fund further expansion into original shows. According to Andy Forssell, Hulu’s Chief Content Officer, the company has a “very healthy business.”

“When you have a healthy business, capital is not a problem. There are plenty of people who want to help,” he said.

The “healthy business” he’s referring to can be seen in Hulu’s recently released subscriber numbers and sales figures. Last week, Hulu CEO Jason Kilar spoke of how the business grew more than 60% in 2010 to approximately $420 million in revenue and now has over 1.5 million subscribers. 1.1 million of those customers were added over the course of the past year. That’s good news for Hulu. But then again, compare that with Netflix, which was growing at a rate of 1 million subscribers per quarter (or more), prior to the pricing debacle. It’s clear that it’s going to take more than just network TV to give Hulu an edge. Original programming may be just what it needs.

Today’s announcement of Hulu’s first scripted series comes on the heels of Netflix’s preparations to launch its first original series, a “fish out of water” tale from Steven Van Zandt called Lilyhammer. Both shows will debut in February.

This is the start of a growing trend towards original web programming. In addition to Netflix’s Lilyhammer, Tom Hanks is making a cartoon TV series for Yahoo. There’s also House of Cards, starring Kevin Spacey, which will also appear on Netflix, along with other original shows (it is also resurrecting Arrested Development, much to audience’s delight.).

For content creators, these efforts could lead them to entirely new ways to have their work seen, even if they don’t (yet) reach all of the 115.9 million mainstream TV consumers. Fox, for example, passed on Battleground before it found a home on Hulu. There’s more content out there than there are network time slots. If Netflix, Hulu and others want to move into original programming, it’s there for the taking.

Hulu CEO Jason Kilar just posted a recap of the online content business in 2011, and revealed that Hulu’s revenue grew 60% from 2010 to approximately $420 million. While the growth is a good sign, this is less that the $500 million expected for the year.

Kilar says that Hulu Plus now has more than 1.5 million paying subscribers and is attracting more than 2 times the number of subscribers each day when compared to this time last year. Hulu continues to expect that its subscription services will account for more than half of Hulu’s overall business later this year.

In terms of content, Hulu’s content grew approximately 40% vs 2010 and Hulu Plus’ content offering grew more than 105%. Hulu Plus is the only online video subscription service that offers current season content from 5 of the 6 largest U.S. broadcast networks. As we’ve written in the past, part of the value of Hulu is in the content deals it has with its owners to stream new NBC, Fox, and ABC television series over the Internet.

Overall, He wrote that the Hulu ad business “grew aggressively” during the year, despite the declining economy and soft ad market in the last half of 2011. As a whole, Kilar is optimistic and “bullish” on the company’s 2012 growth. The company plans to invest approximately $500 million in content in 2012 (though it’s unclear where all of this money will come from).

Not mentioned in the note were the reports that Hulu was shopping itself around for an acquisition last year, and got offers from Google, Dish Networks, and Amazon. The company ended these talks in October.

For basis of comparison, Netflix did $822 million in revenue last quarter. Basically, Netflix does nearly twice as much revenue in one quarter as Hulu does in a year.

Hulu does TV shows better than just about everyone. In fact, other than YouTube, Hulu attracts the highest level of engagement of any web video platform (with the average web viewer watching an average of 3.2 hours a month). That being said, Hulu has never done social particularly well. Sure, users interact on Hulu discussion boards, tweet clips to friends, and share shows on Facebook, but the platform has long been in need of a better way to find and share TV shows and movies.

So, today at F8, Hulu announced the launch of a brand new Facebook app, which endeavors to make the Hulu experience social. How exactly? For Hulu users this means getting to watch the video platform’s content directly within Facebook. Now you no longer have to leave Facebook to watch Hulu. And judging by all the news out of F8 today, soon you’ll never have to leave Facebook, period.

The videos you watch on Hulu are automatically shared with friends (approval is needed, thankfully). What’s more, according to Hulu’s blog entry today, the Facehulu app will give you a comprehensive glimpse into what your friends are watching, in realtime, and allow viewers to spark conversations with each other about what shows they’re watching and how bad the new season of House is.

The coolest part? As you’re watching Hulu content, be it a full show, clip, or film, you can leave comments on particular moments within the video. Oh yes. SoundCloud-style. And, naturally, once you leave a comment on a particular moment, you can then blast it out to friends to let them know how clever you are — on both Hulu and Facebook.

And for those zealous Hulu Plussers out there, you will be happy to know that the new Facebook app will give you access to your entire H+ library on Facebook, and discuss, comment and share in the same way the unwashed regular Hulu subscribers do. And, for all Hulu users, an important thing to remember: You can change your share settings at any time by clicking on the “share to feed” icon and selecting “Hulu and Facebook” or “No One. Do not share what I watch.” (Or you can go to Facebook or Hulu’s privacy settings.)

We welcome you, Hulubook. Facebulu.

<a href="“>Check it out for yourself here.

Hulu Plus has found its way to a handful of Android devices these past few months, but today it makes its first official appearance on an Android tablet — just maybe not the one you were expecting.

Forget about the Motorola Xoom or the Samsung Galaxy Tab, Hulu Plus is making its tablet debut on the cost-conscious Vizio Tablet. It has to be something of a coup for the budget OEM, but it certainly fits in with the tablet’s focus on media and connectivity: it packs three speakers to pump out the jams and a universal remote app to take control of compatible home theater systems.

As fortunate as Vizio is to land the $7.99/month service, the decision may have been made at least partially to account for the ease of execution. Unlike the rivals listed above, the 8-inch Vizio tablet runs Android 2.3 (a.k.a Gingerbread) instead of Honeycomb, which puts it closer in app compatibility to handsets than its tablet brethren. The Hulu Plus app team would have had spend a few extra man-hours to make the app Honeycomb-ready, but not so with the Vizio tablet.

Still, easier execution or not, the addition of Hulu Plus will make the whole package more palatable to the media-crazed. Current owners can download Hulu Plus now from the Android Market, and newly interested parties can pick up a tablet for a shade under $300.

A week ago, Fox changed its licensing rules so that non-paying users of Hulu would be unable to watch new episodes of their shows until eight days after their air date. Put on your analyst hat and think about what effect this might have on, say, piracy of those shows. Did you determine that it would increase piracy? Congratulations, you are a better judge of consequences than Fox. Because piracy of Fox shows went up by a huge amount during this last week.

Actually, it’s likely that Fox anticipated this increase in piracy and simply considered it worth the trade-off. With worse options for free users, more will watch the live broadcast, they suppose, and ad prices go up with these increased projections. Query: if these people could watch it on live TV, why would they be watching it on Hulu in the first place?

For busy and budget-conscious TV-watchers, expensive cable and a DVR aren’t an option. Hulu is. Hulu gets shows out there, allows for targeted, relatively unskippable advertising, and with a reasonable one-day delay, doesn’t add much inconvenience to the bargain for the user. This eight-day delay is punishing, and while “getting something for nothing” is a rather new entitlement we all seem to have, it does feel like a bait-and-switch for millions of viewers.

So what do they do? They google “download ______”, and halfway down the first page is a public, well-seeded torrent that downloads the whole episode — with no ads — in minutes, and allows them to use their favorite media player or take it with them anywhere. Wow! What a great way to watch your favorite shows!

TorrentFreak tracked the piracy of two Fox shows after the delay went into effect. Hell’s Kitchen downloads went up by 114%, and MasterChef went up a massive 189%. That number will only go up as more people discover the limitation.

Will Fox backpedal? Not likely. But Hulu is a work in progress, and the cards change hands rapidly in this business. What seems like a good deal to Fox now, improving their broadcast relationships, might turn out to be a ball and chain a year from now as the practicality of cord-cutting grows.

Sometimes companies have to do things that their customers don’t like. Raise rates, for instance. Ugly but inevitable. But making decisions plainly detrimental to your customer experience for mysterious reasons will have repercussions. In this case, they just lost thousands upon thousands of loyal viewers who enjoyed their products, many of whom consider themselves abused and will never return.

Premium video streaming site Hulu has just announced that it’s about to make its first international expansion: Japan.

Hulu is keeping mum on the details, but it sounds like it will only offer a premium subscription service (the US version of Hulu offers both premium and free content). The company now has an office in Tokyo and is working on preparing for launch “later this year” (again, no more details on that front).

From the blog post:

We are excited about entering Japan right now for a number of reasons. For one thing, Nihon wa subarashii kuni desu (“Japan is a wonderful country”). Japanese audiences are passionate about premium video content, and the country is a major producer of world-class TV and feature films (Japanese content has played an important part of Hulu’s content lineup in the United States for a long time already). In Japan, we also see an unfulfilled market need with respect to premium feature film and TV content, and very favorable environmental factors to a service like ours, including extensive broadband penetration, smart phone and other internet-connected device ubiquity, and strong consumer interest. We have been able to use what we have learned from Hulu and Hulu Plus, in addition to the insights gleaned from our market research, to design a high value product specifically tailored for Japanese customers.

Hulu has established itself in the United States as a prime destination for watching the latest television shows (and, increasingly, movies) featuring content like The Daily Show and The Office. It launched Hulu Plus in June 2010, which is a premium subscription version of the site that costs $7.99 and offers more content across more devices, including the iPad and Xbox 360.

It is also hampered by the frustrating restrictions of content owners, who enjoy making their content available for arbitrary time periods and then removing it. Not that it’s ever burned me.

Editor’s note: The following guest post was written by Ashkan Karbasfrooshan, founder and CEO of WatchMojo.

While Yahoo! remains the best positioned digital media company around, Wall Street remains unconvinced.

Yahoo!’s revenues are not growing as fast as other online media companies (GOOG, AMZN, Facebook, etc).  Moreover, between Facebook’s grip on display ad inventory and DSPs changing the way advertisers buy inventory, Yahoo’s core business (display, reach) is under threat.

If that weren’t enough, the Alibaba/Alipay situation illustrates that it’s only a matter of time before investors, analysts and the media force Yahoo! to shed its Asian assets. Once the company unloads those assets, the cash on its balance sheet will soar, but its enterprise value (market cap + debt – cash) will plummet.

Block and Tackle, but Look for Hail Marry as Well

As Yahoo! plays catch up investing in video . . .  it might realize that it needs to make some tuck-in acquisitions and consider throwing a hail marry, too.

Post Asian asset sales, Yahoo! will find itself with:

• lots of cash on its balance sheet
• a lower enterprise valu
• tepid revenues
• growing threats
• an opportunity to grow in video.

Yahoo! will be able to use some of the cash on its books to acquire Hulu to compete with Netflix, Google/YouTube and Amazon more effectively.  Otherwise, the status quo means a company that will become gobbled by one of the larger companies out there.  Not a bad fate in of itself, but not a fate it needs to back itself into either.  Yahoo! can also be taken out by a private equity firm, something that I’ve long argued would have its share of benefits.

Content is a Woman, Distribution is a Man

I’ve cut hundreds of deals with distribution companies.  The conclusion I’ve reached is that—for lack of a better analogy—Content is a woman, Distribution is a man.  In other words, historically distribution companies

• make no commitments,
• never make any promises,
• have no-strings-attached offerings,
• rarely seek exclusivity, and
• when they do, it’s usually too good to be true.

Content owners, meanwhile,

• enter distribution deals with expectations,
• believe the promises they hear,
• expect a commitment, and
• want a guarantee.

As a man, I can’t help but admit that in the end, women prevail and men have to come around if we want to play along.

As a content owner, it’s reassuring to know that.

Is Hulu a Content or Distribution Company?

In case you’re asking: is Hulu a content or distribution company, well, it’s a hybrid.  Technically it’s a distribution company but its pedigree is content (via its owners).  If someone buys them and gets exclusive rights, it becomes more of a content play than a distribution or tech play.  The reality is that to most buyers its traffic and technology are worth less than its content rights, especially if those rights become exclusive.

Welcome to an Era of Exclusivity

Meanwhile, I expect Facebook to move away from being a pure-play platform and move further into becoming a media company striking content deals, including exclusive content rights and content acquisition deals (learning from Google/YouTube’s early missteps and trying to jump some steps and save time to justify its $70 billion market cap despite relatively low revenue figures).

Lost in the recent “will Hulu sell?” talk is “why would Hulu’s owners want to sell?”  Its owners are of course some of the largest traditional media companies (TMCs) including News Corp., Disney and Comcast (via NBC Universal).

Hulu raised $100 million at a $1 billion valuation.  It’s unclear if the consortium of media companies and the private equity firm Providence share a vision for the exit, or end game.  Even if Hulu’s value has risen since that deal, the increased value on the TMCs’ balance sheets means little to media companies.  Moreover, Providence realizes that without the rights to the content, no buyer would take a stab at Hulu.

The Mother of All Pivots?

So a company like Yahoo! will be tempted to “pivot” its plodding aircraft carrier and acquire Hulu and then use the cash left from the Asian assets (net of the $1-2B rumored to buy Hulu) to then fork over licensing fees to the media companies as a carrot to lock in rights—dare we say exclusive rights—for years to come.

As much as some pushed the “non-exclusive” and “hyper-distribution” mantra, those are dead in the water.  The web will “regress to the mean” of media and advertising and see more and more exclusive deals.  Those are the kind of deals that make television a $70 billion advertising industry and $250 billion ecosystem including other revenue streams.

Hulu’s Strategic Options

This begs the question: what about an IPO?  If Hulu goes public at a valuation of $1-2B and sells 10-50% to the public it will only generate a few hundred million dollars; not nearly enough to be used to pay off the big media companies that now own Hulu in licensing fees.  Combined with Hulu’s low margins, this means an IPO won’t maximize Hulu’s value, which means the big media companies won’t have an incentive to pursue the IPO path.

Of course, Hulu’s current investors could sell some shares in the IPO, or  hold onto their stakes and sell later in a secondary offering in the hopes that the valuation goes higher if they continue to improve the content they give Hulu and/or increase revenue.  But, let’s be realistic here, media companies are risk-averse and realize that if they can sell Hulu, give up some exclusive content in the process and concurrently lock in a decent annuity that is more than a positive outcome for what was once labeled Clown Corp. by an influential blog a few years ago.  This is all even more pertinent considering that the cloud overhanging Hulu’s content licensing terms and profit margins will remain risk factors in its prospectus.

However, Hulu in the hands of someone like MSFT/YHOO/GOOG would be able to pay the TMCs hundreds of millions of dollars per year in licensing fees.  While a ballooning value on paper and increasing goodwill on their balance sheet does little to move the needle for the TMCs, hundreds of millions of dollars in annuities on their income statement will.

Combine this with the facts that:

• Google/YouTube is eager to use $100 million (if not much more over time) to offer Fortune 500 marketers the kind of content they’re used to advertising alongside,
• Facebook is armed to the teeth with hundreds of millions in cash from operations and the sale of stock to DST, Goldman, etc., and increasingly eyeing content,
• Netflix is opening its wallet to TMCs for content,

then you can imagine that Yahoo! realizes it needs a new playbook and the TMCs want to create more competition for their content.

As it turns out, Sumner Redstone was dead right: with new distribution channels the value of content rises.  While content and distribution are equally important and one without the other is worthless, suddenly content companies will find themselves in a landscape of heightened competition which will see the value of their content rise.

Disclaimer: YouTube, Hulu, Yahoo! are all WatchMojo’s distribution partners.

If you’re one of the Internet’s many denizens still shedding an oh-so-first-world-problem tear over Netflix’s business strategy overhaul pricing changes, you’re probably still looking for somewhere else to spend your two lattes worth of monthly fees in exchange for countless hours of entertainment. Hulu Plus, perhaps?

If you’re an Android user, chances are pretty decent that Hulu Plus just got a lot more useful for you; this morning, Hulu is announcing streaming support for four of the most popular Android devices around.

The new devices getting Hulu Plus this morning:

• Sprint Evo 4G
• T-Mobile G2
• T-Mobile myTouch 4G
• Verizon Thunderbolt

This update brings the Hulu’s Android stable up to 10 devices, with the Nexus One, Nexus S, HTC Inspire 4G, Motorola Droid II, Motorola Droid X, and the Motorola Atrix having been supported from the get go. The lack of support for certain popular handsets — namely, the Evo 4G and the super-trendy Thunderbolt — surprised the heck out of us at launch, so this is a welcome update.

Of course, Hulu Plus isn’t really much of a substitute for Netflix. Sure, you might be able to watch Family Guy or The Daily Show (depending on what sort of mood Viacom is in), but only on Netflix can you find such gems as White Chicks or Alive! Is Michael Jackson Really Dead?.

A new study by Yahoo (embedded below) shows that online video watching habits are shifting. People are watching longer videos and watching more at night during primetime. The chart above shows when people watch videos online. The blue line is today (2011) and the dotted line is two years ago (2009). The two lines show more than a 30 percent divergence during primetime.

So what changed? Peak online video viewing today is during prime time, between 6 PM and 9 PM. Only two years ago, prime time showed the biggest dip in online video viewing as people turned off their computers and turned on their TVs. But now, more people are streaming TV shows and movies from services like Netflix and Hulu, and they tend to watch those videos during the same time period they previously watched regular TV. While people may not yet be cord cutting, this data suggests that online watching does encroach upon regular cable and satellite TV watching.

Not surprisingly, people are watching longer form videos online (see chart below). Today, 18 percent of online videos watched are full length TV shows, versus 11 percent two years ago. And 8 percent are full-length movies, up from 5 percent in 2009. Meanwhile, the percentage of overall video content made up of short clips watched online declined by 10 points from 84 percent to 74 percent.

Some other interesting stats:

• A smaller percentage of people are sharing videos, 26 percent versus 34 percent in 2009. This may be due to older people watching online videos, and sharing less.
• Advertiser recall is better with ads on professionally produced videos (45 percent) than on videos “made by people like me” (36 percent).
• Videos online are more likely to be watched when shown in the context of an article, with 57 percent of people saying they enjoy the video + article combo.

Tired of not being able to get your on-the-go Modern Family fix from Hulu just because you’re rockin’ an Android phone rather than an iPhone?

Fret no longer! Hulu Plus for Android has arrived. Sort of.

As is par for the course with video streaming apps on Android these days, Hulu Plus for Android is starting its life on… a very select bunch of handsets. Of the many dozens of Android devices floating around out there, Hulu Plus will initially support six: Nexus One, Nexus S, HTC Inspire 4G, Motorola Droid II, Motorola Droid X, and the Motorola Atrix.

Hulu says that “additional devices will be announced throughout the year” — but unless you’re sporting one of the more popular US handsets (like, say, the EVO 4G or the Droid Charge), I wouldn’t get my hopes up.

Yahoo hasn’t had any meaningful conversations with Hulu about a buyout, says this source. The source added that Hulu is actively looking for a buyer and has hired Morgan Stanley to represent them.

Like I said, this is all I’ve got right now. The WSJ and the LA Times say they have sources confirming that Yahoo made an offer. With big acquisitions the press is a huge pawn in negotiating strategy. The one thing I’d like to know is who’s the source for the LA Times article. If that source is close to Hulu or Morgan Stanley, I’d be wary. Of course, my source has her own agenda, too.

Two weeks after Miramax announced a major content deal with Netflix, the studio this morning announced that it has also struck a multi-year agreement with Hulu to bring hundreds of films, including Pulp Fiction, Good Will Hunting, Scream and The English Patient to Hulu Plus subscribers. Hulu will offer select films via the advertising-supported Hulu.com service to boot.

Launching today, Hulu Plus subscribers will be able to watch Miramax movies in HD (when available), with no advertising interruption.

Additionally, Hulu says it will “soon” rotate a selection of approximately 15 Miramax films each month through Hulu.com with ad breaks, marking the first time Miramax titles have become available through an advertising-supported streaming service.

Miramax currently boasts a library of more than 700 motion pictures.

We happy? Yeah, we happy.

At the end of last year, Miramax announced that Michael (Mike) Lang had joined the studio has chief executive officer. I mention this because Lang was previously EVP, Business Development and Strategy at Fox, where he played an instrumental role in Hulu’s creation.

The service is launching tomorrow and you’re basically getting the Hulu interface with which you’re familiar plus a few Kinect add-ons including voice control and gestures. With sufficient bandwidth you also get high-quality streaming on what Microsoft is calling the “biggest screen in your house.” The service will be available for free from April 29 – May 6 and will thereafter cost $7.99 a month.

Click through for more info on the service, including some words about Kintect interaction.

By the end of this year, an estimated 2 million households in the U.S. will have abandoned TV for the Web, cutting the cord with their cable companies. This estimate comes from Convergence Consulting Group, a Toronto-based research firm with a new report on The Battle for the American Couch Potato. That 2 million is up from the 1.6 million it was estimating a year ago, but it is still rather small and the number of cord cutters may very well have peaked last year as cable companies begin to fight back with TV Everywhere offerings.

Nevertheless, the big beneficiaries of cord cutting are Netflix, Hulu, and Apple TV.  They benefit even if people keep their cable but add Internet TV streaming or downloads to their viewing repertoire, as is much more common. According to Convergence , 18 percent of viewers in the U.S. watched free, full episodes of TV on the Web last year, and that is growing by a percentage point every year:

Estimated Percentage of Average Weekly US Viewers That Watch Free Broadcast and Cable Network Online Full Episodes, 2009-2012

2009—16%
2010—18%
2011—19%
2012—20%

Streaming has helped Netflix in particular in terms of driving new subscriber growth, and it is also arguably a gateway drug to cord cutting.  Convergence estimates that Netflix revenues from online-only subscribers in the U.S. will grow from $172 million this year to $578 million in 2013.  And if you add in Hulu Plus, the combined streaming revenues from both companies will reach an estimated $800 million in two years.

Netflix may be paying up to be able to stream TV shows and movies left and right, but it is still paying only a fraction of what the cable companies shell out for programming. For instance, Convergence says that this year Netflix will double the amount it is estimated to pay for programming to $1.1 billion, while Apple will pay about $450 million, and all the other online providers will pay almost $400 million. Not quite $2 billion total from the Interent for TV and movie programming rights. Meanwhile, traditional TV access providers are expected to pay $38.7 billion for programming.

On a per subscriber basis, last year Netflix only paid one tenth the amount for programming ($34/subscriber) as did cable and satellite TV providers ($359/subscriber).  As a percentage of revenues, it is approaching what TV access providers pay for content.  Last year it was 25 percent of revenue going towards content, and this year it will be an estimated 39 percent, versus 42 percent for cable companies (and 70 percent for Apple TV).  But the absolute gap will remain massive for the foreseeable future.

Photo credit: Flickr/Schmilblick