Hulu plans to boost spending to $500m in 2012

January 24th, 2012

Hulu, the online video site owned by Walt Disney, News Corporation and NBC Universal, has revealed plans to spend around $500 million (£321 million) on programming this year and has commissioned its first scripted original TV show.

The firm’s 2012 budget – up from $375 million (£240 million) in 2011 – will be spent on acquiring new content as well as programming provided through its parent companies as part of a bid to compete with rival Netflix and cable television operators’ online services.

Its first scripted original effort is a 13-episode faux-documentary-style political drama called Battleground, which follows a group of campaign workers in the battleground state of Wisconsin.

Hulu has also commissioned a second series of Morgan Spurlock’s documentary series A Day In The Life and another documentary series called Up To Speed by Richard Linklater, director of Dazed And Confused and School Of Rock.

The online video service launched in Japan last September with the aim of expanding around the globe. Hulu and Netflix dominate online video viewing in the US with cable and satellite operators closing in on their lead. However, plans to set up a service in the UK have stalled because the company has yet to secure suitable content.

Hulu generated about $420 million (£270 million) in revenues in 2011, up 60 per cent on the previous year. The company’s Hulu Plus subscription service now has 1.5 million subscribers, compared to 20 million subscribers to Netflix, which offers a subscription DVD service, as well as online video streaming.

Hulu chief executive Jason Kilar wrote in a blog post that the company’s two-pronged revenue model of advertising and subscription fees meant it could pay more for content than other online subscription services. “We believe our approach will enable us to secure more valuable content for our users and to secure content in more attractive windows than would otherwise be possible,” he wrote.