Good, just not as good as you promised

Depending on where you read the coverage of Hulu's revenue numbers, the picture of the company looks very different. Read Write Web declares that the company turned in a "pretty big year," growing 60 percent and "raking" in $420 million in revenue. But as Peter Kafka points out at All Things D, that falls short of the $500 million Hulu CEO Jason Kilar predicted the company would make in several blog posts.

Mr. Kafka attributes the miss to rumors of soft ad sales which have been percolating for a while. Hulu also was on the chopping block for a while, then off again, then back on. And several of its partners, most notably Fox, either took away next day rights for programming or discussed the idea. All that volatility is sure to make it tough for Hulu to sell ads. 

2011 promises to be a fascinating year in web TV, with Google poised to launch its professional "channels" and Netflix its original web series. Hulu's parents, the major TV networks, have made it impossible for the service to expand to platforms like Boxee and Google TV. Even Apple TV, normally a safe space for corporate greed, has apparently been held up for political reasons.

After basically trying to get himself fired in a Jerry Macguire style blog post about the future of TV, CEO Jason Kilar seems to have calmed down. He is no longer firing off bombs about how, "“History has shown that incumbents tend to fight trends that challenge established ways and, in the process, lose focus on what matters most: customers.” Hulu has a nice mix of revenue streams from its premium subscribers and its high end digital advertising. After watching Google TV flop in its first year and Netflix take a nosedive with it Qwikster fiasco, Mr. Kilar may feel like Hulu and its 60 percent growth is a pretty good place to be. So good in fact, that despite not making $500 million this year, he's going to spend that much on content in 2012.

Time to pull back the curtain on Hulu

The ongoing Hulu saga reminds Betabeat of some kind of Greek myth. Created as the bastard scion of the old TV networks, Hulu is a popular and perhaps soon-to-be profitable service. Yet increasingly it is at war with its parents, who have been kneecapping the upstart to preserve their own power.

The new last week that a sale of Hulu is being considered brought focus on an important detail: Without the networks feeding it exclusive content, Hulu is much less appealing to both consumers and potential acquirers. So Peter Kafka's report today that the service has locked in its exclusive content deals with Disney and Fox is heartening for Hulu fans.

One big downside looming is that the network owners are considering extending the window of time between when shows air live and when they end up on Hulu. Right now it's next day delivery, but the LA Times reported last week that could grow to as much as eight days. Increasingly studios like HBO are locking up immediate web access to their shows inside an subscribers only app.

The whole thing must be pretty frustrating for Comcast, which got a big piece of Hulu when it purchased NBC, but basically agreed to give away its negotiating power in order to make the deal pass muster with regulators. As for Hulu CEO Jason Kilar, it's a safe bet he's ready for a change, whether that's a new owner, or a chance to cash out his equity stake.

A lot of folks were pretty pissed about the whole thing, and lost in the fracas were some big growth numbers that Kilar pointed out to bolster his argument. With the first quarter of 2011 just wrapping up, Kilar added a few details to the financial momentum he highlighted in his previous post.

Hulu is on pace to hit half a billion dollars in revenue this year, which is roughly double the $263 million they did in 2010. Breaking that down a little, Kilar says Hulu's first quarter  revenue grew 90 percent year over year.

That would indicate that the biggest driver of these gains is, not surprisingly, Hulu Plus, the subscription service the company officially launched back in November of 2010. Kilar says the company is on pace to have more than a million subscribers by the end of this year, not to shabby, but nothing like the 20 million claimed by Netflix.

In a lengthy blog post, Kilar laid out the future of web TV as Hulu sees it, and didn't mince words when describing the traditional TV networks, Hulu's parent companies.

"History has shown that incumbents tend to fight trends that challenge established ways and, in the process, lose focus on what matters most: customers. Hulu is not burdened by that legacy."

Kilar says Hulu is on track to reach a half billion dollars in revenue this year, a number that includes advertising and subscription fees, and points out that his company is already earning very attractive rates on ads when compared to the industry as a whole.

Often Hulu is referred to as the corporate teacher's pet in the landscape of web TV, but it's clear Kilar has a different identity in mind.

"A number of you that are reading this might be thinking that we’d have to be crazy to think that our small team can actually re-invent television and compete effectively against a landscape of distribution giants like cable companies, satellite companies, and huge online companies," he wrote. "We are crazy. All entrepreneurs need to be."

bpopper [at] observer.com | @benpopper