Hulu is in negotiations with News Corporation, owner of the Fox networks, to increase the numbers of ads delivered by Fox during Hulu content. Currently, Hulu delivers most of the ads during an episode, however, the networks providing the content are allowed to deliver some of the ads. News Corp wants to deliver more of those ads.

Making the content available online causes a share drop on TV ratings and that causes a revenue drop. Networks would like to be able to carry over some of the same advertisers so those revenues do not drop as significantly. Hulu benefits from carrying networked content because that is what draws the crowds.

Photo: Houston Press Blogs

The bellwether came from the CW Network’s online offerings. In 2010 the CW Network’s online advertising reached almost the same load as the broadcast advertising load. While many would expect this to drop viewership, it actually rose by 55% and 94% of the ads were watched to completion.

Many digital agencies may have felt stymied about advertising on TV content providers. The CW Network’s experiment, however, turns the conventional wisdom about viewers being allergic to ads on its ear. This will probably result in a rise in the amount of ad space available as well as a drop in those prices. This can be expected until certain levels of viewers have cut the cord and then viewership will become allergic to those advertisements. For now, however, we are not at that tipping point.

Ad Age Mediaworks: News Corp.’s Hulu Hope: To Add More Commercials