Hulu: Five Burning Questions

Image credit: © 20th Century Fox

Does this mean more bad news for DVDs?
It's possible that DVD-rental companies like Blockbuster and Netflix will suffer a hit from Hulu. Execs at MGM and Twentieth Century Fox, which could see their DVD sales drop now that lots of their content is free at Hulu.com, weren't available for comment. But, surprisingly, this model of distribution has proved profitable for networks. ''The idea of putting full episodes of prime broadcast content online has been around since May of 2006 — it started with ABC.com,'' says Tracey L. Scheppach, senior VP and video innovations director at Starcom USA, which analyzes digital-viewing habits. ''We've seen a lot of success for advertising and a lot of interest from the consumer to watch full episodes this way. It appears to not be cannibalizing regular, linear television because most consumers who are watching are saying they're catching up.''

How does this differ from Apple TV and iTunes?
For starters, Hulu features free, ad-supported content, and all you need is a decent Internet hookup and a browser. An episode of The Office, for example, includes two 15-second ads and a 30-second commercial in the middle. The site does not require any kind of download service, credit card number, or separate device (or ''client'') for access. ''They've found a way to make it a premium-advertising environment, so you'll generally see the full episodes with significantly less commercials,'' says Scheppach. ''Advertisers like that because then you remember the commercials that are there. iTunes is successful, but I think consumers are wanting this content for free.''

Okay, this is all great, but can I ever expect to see Lost on Hulu?
Hopefully, yes. At press time, Hulu has yet to reach distribution deals with ABC or CBS (ABC and Apple declined to comment for this piece; CBS chief Les Moonves has praised Hulu publicly and said he could envision some kind of partnership). If a user searches for a series Hulu doesn't have, links are provided to where the series can be watched. Going forward, it will certainly help that the site has two of the industry's most powerful execs at the negotiating table. ''That's our role, to help Jason, and Jason's role is to run the business,'' says Chernin. ''Whenever he picks up the phone and asks me to do something, I'm happy to do it.''

Still, Hulu is clearly a work in progress: Certain series only have one or two seasons available, and others are missing completely (American Idol). The full-length feature films tend to vary in quality, from the blockbuster (Ice Age) to the random (Dr. Goldfoot and the Bikini Machine). Plus, there's no music content, which, according to Chernin, is not in the future plans. (The site has struck a deal with the NBA for sports content.)

When pressed for first-week numbers, a Hulu spokesperson claimed that users and streams had ''increased,'' but declined to offer specifics (while in its beta-testing stage, however, the site was all too willing to cite its initial 5 million users). Some independent tracking seems to corroborate this, though many companies that compile such analytics did not have figures at press time. It's too early in Hulu's life to decide if, like YouTube, it could eventually revolutionize the way media are consumed. For now, it's a nice way to catch up with old friends.

(Additional reporting by Tanner Stransky)

More on Hulu:
EW's Ken Tucker takes Hulu for a test drive