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Hulu's New Economics: $240 Million In 2010 Revenue

But The Online TV Service Keeps A Fraction of Ad Sales

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Did Hulu's IPO road show just start? At GigaOm's NewTeeVee Live conference today, Hulu CEO Jason Kilar lifted the veil on some of the three-year-old video site's economics. The company will earn $240 million in revenue in 2010, he said, up from $108 million in 2009.

That tracks pretty closely with Hulu's audience growth and the increase in online video ad spending. Video ad spending is expected to grow 48.1% to $1.5 billion between 2009 and 2010, according eMarketer.

Hulu's revenue numbers sounds more impressive, of course, until you consider that Hulu only keeps a fraction of it -- somewhere between 20% and 30% -- and passes the rest on to the networks that provide content and to other distribution partners. Still, Hulu's revenue compares pretty well to YouTube's expected $500 million in 2010 revenue; YouTube serves many more videos, but gets most of its revenue from banner ads on its homepage, ad units that Hulu doesn't offer.

Among other things, Hulu said it is doing business with 352 different advertisers and 25 of the top 25 marketers.

Mr. Kilar said Hulu had 30 million users in the past month, and served 800 million video ads. That's nearly identical to ComScore's measure, which had Hulu at just over 30 million unique viewers in September and 1.4 billion videos streamed. For comparison, YouTube had 144 million unique U.S. viewers in September and served 13.5 billion videos.

Reuters reported last month that Hulu is preparing to raise as much as $300 million in an initial public offering likely to be led by Morgan Stanley. The deal would value the company at $2 billion.

To make that a reality, Hulu would have to re-up with its core network content providers, whose deals all expire over the next few years. Hulu is, essentially, an online ad network for television and serves the purpose of keeping online ad rates high for premium TV.

Still, tensions between Hulu and the networks are frequent. Network online sales execs hate competing against Hulu in the market. NBC, for example, is buying back most of its inventory from the service to offer it directly to advertisers.

Want to see what Hulu's IPO road show could look like? Take a look at the slides Mr. Kilar showed today.

Follow Michael Learmonth on Twitter.

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