NBC, News Corp. Web Video Venture Taking Shape

News Corp. and NBC Universal’s Web video joint venture Hulu is rumored to have acquired Mojiti LLC, a privately held company based in Beijing, China. The blog TechCrunch first broke the news, citing a source with knowledge of the deal.

These sources suggest Mojiti’s price was in the “$10 million range.”

Hulu spokeswoman Christina Lee would not comment on “speculation” and promised that all would be revealed when the site goes into beta testing this October. Mojiti did not respond to a request for comment.

If the rumors are true, however, Hulu is acquiring a Web video technology that, according to Mojiti.com, allows users to narrate personal videos, add subtitles in any language or comment on video scenes with over-laid text and audio. Unlike YouTube, Mojiti does not host or distribute video content, but rather aggregates online video with users acting as Web crawlers.

Truth or rumor, Forrester research analyst James McQuivey told InternetNews.com he wouldn’t be surprised to see Hulu make this kind of move.

“The surprising thing is that these kinds of announcements and rumors haven’t happened sooner,” McQuivey said.

That’s because when NBC and News Corp. first announced plans to form a video distribution network for premium content last March, News Corp. president and CEO Peter Chernin and NBC Universal President and CEO Jeff Zucker said the network will debut this summer with thousands of hours of full-length programming, movies and clips from at least a dozen networks and two major film studios.

That didn’t happen. Despite, even, an early deal with broadband video application service provider thePlatform.

Instead, NBC spent August getting its shows booted from Apple’s iTunes store and agreeing to terms with Amazon.

Meanwhile, the most popular Web video site, YouTube, got more popular. According to Nielsen//NetRatings, YouTube had a “unique audience” of 56 million in August, a 66 percent increase over the same month in 2006.

Those are tough numbers to compete with. Too hard, maybe.

That might be why Hulu went after a company like Mojiti, which offers users a viewing experience not already available on YouTube, JupiterResearch analyst David Card told InternetNews.com.

“I don’t think everybody needs to try to be YouTube. That formula is working for YouTube, but it’s not necessarily working for anybody else,” Card said.

McQuivey concurred.

“If the rumors are true, it’s because Hulu is eager to come out of the gate having technologies that aren’t just me-too technologies,”
McQuivey said.

Hulu also has to compete with itself. Or at least its parent companies, McQuivey said. Since Hulu will feature repurposed content from NBC and News Corp., it might be counting on interactive technologies such as Mofitis as way of keeping the content fresh for viewers to watch again on the Web.

McQuivey and Card agreed that it makes sense that Hulu would choose to buy those types of features rather than build them in-house.
Especially if you consider that Hulu is the product of a television networks, Card said.

“The core skill set of a TV network is setting up a lineup, whether they created the content themselves or not, and then gathering up an audience and selling that audience to advertisers,” Card said. “Their real skills are in audience aggregation and ad sales as opposed to producing stuff directly.”

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