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2008 Year in Review: Hulu has a party

December 24, 2008 — 9:46am ET | By Pete Wylie

Tools

CEO Jason Kilar and the rest of the Hulu crowd can give each other a nice round of applause after a simply excellent year for the online video aggregation company. Hulu has won over an astonishing amount of viewers since exiting public beta earlier this year, rising to be the sixth most visited online video destination.

What's more, once viewers get to the site they tend to form positive associations with brands that advertise there, according to a company survey performed earlier this year. Hulu keeps moving toward profitability, while competitors either struggle to develop large audiences, like Veoh, or can't make enough money off of gigantic audiences, like YouTube. Hulu isn't profitable yet, but the site is demanding high CPMs for ads over its content. It seems likely that the company will be cash positive by this time next year.

While Hulu's viewing statistics were slightly down for November, most of that is likely attributable to a drop in views after election season concluded. It continues to have exclusive rights to popular content delivered from its parent companies News Corp. and NBC Universal, and it will use this advantage to keep a lock on its audience base.

Hulu does face intensive competition, as other online video aggregators scramble to copy Hulu's most popular features in hopes they will breed the same success. But between Hulu's user interface, which features a slick, minimalist design that users rave about, and the superior quality and performance of the exclusive content it streams, it remains clearly ahead of the pack of emulators.

The company also relies heavily on advertising, which could be a liability if advertisers significantly reduce spending in 2009. But several studies have indicated that digital budgets will be the last to be cut when such reductions occur -- another nice factor for Hulu as it enters 2009 as the clear leader in the space.