A New Way to Watch Tv

Section: TECHNOLOGY

A New Way to Watch TV

How two old-media dinosaurs--Fox and NBC Universal--created a cool venue for their hottest shows. The inside story of Hulu.com

WHEN FOX AND NBC Universal announced last March that they would join forces to put their TV shows online, the pundits of Silicon Valley howled with derision. Old media doesn't get the Internet, they said. Michael Arrington, the influential editor of TechCrunch, rattled off the reasons the project would never succeed and suggested that Fox and NBC quickly name their joint venture before it got stuck with the moniker insiders at Google had reportedly given it: Clown Co.

So there was huge relief at Hulu, as the company is now called, when it previewed an early version in late October and the first reviews started coming in. The very people who had thrown brickbats were now tossing raves. "In one word: brilliant," wrote blogger Om Malik. Even Arrington declared himself "very impressed."

Hulu CEO Jason Kilar calls that the company's "defining moment." Says Peter Chernin, president of News Corp., which owns Fox: "They said big media was too stupid to do anything appropriate on the web, and that NBC and Fox were incapable of partnering. Both charges have been wrong from day one."

Whether or not that's true, the world will soon judge for itself. After one year and an estimated $15 million worth of development costs, Hulu, a video website supported by advertising, is set to debut in early March. A project that is the TV and film industries' best effort so far to carve a place for themselves in the rapidly changing world of digital media is about to have its first major screen test.

Life used to be simple for media giants like NBC and Fox. They produced content, the public consumed it, and advertising and ticket sales generated gushers of profits. Today viewers have their choice of all sorts of venues-digital and analog, legal and illegal-from Apple to Netflix (see table). Some of the most popular...