Hulu to increase content-spend by 67%

US television streaming service Hulu will ramp up its spending to create and acquire content to $500 million this year, a 67 per cent increase, Chief Executive Jason Kilar has said.

The service has grown to two million subscribers, from 1.5 million subscribers at the start of the year, Kilar told an advertising industry conference. Hulu doesn’t break out its full financial results publicly, but said its revenue increased 60 per cent in 2011 to $420 million, driven by a mix of advertisements and subscriptions.

Kilar said Hulu plans to introduce additional new shows later this week to compliment its existing set of content, which includes the reality show “A Day in the Life” and the sitcom “Battleground.”

As an additional pitch to ad buyers considering how they allot budgets to traditional TV and online advertising, Kilar said Hulu now plans to charge advertisers only for pay-per-click placements when their ads are watched through completion. “It was a big opportunity to push the ad business forward,” Kilar told participants.

Speaking more broadly about the market for OTT TV services, Kilar predicted that more digital content would become available for viewers as the funding for licensing agreements increases, similar to how the supply of DVD titles gradually increased as distributors sought out licensing deals for older titles.

Asked about the debate over “net neutrality,” Kilar said cable distributors couldn’t be faulted for seeking ways to capitalize on their products and technology, but he also pointed to the rules that prevent Internet service providers from deliberately blocking or slowing web traffic as a fundamental principle that makes the Internet innovative.

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