Hulu has done well at commanding a decent CPM and really strong “big name” advertisers.  While not profitable yet, media professionals are seeing Hulu as a nice extension to television, putting all video in one category (either TV, Online, or Mobile).  Sight, Sound and Motion builds brand.  Regardless of the forum, video is huge to communicate brand attributes.  Six months ago, Vevo launched and cut deals with major networks including Google to provide a monthly unique impression total of more than 44 million.  Not too shabby.  They have also signed huge advertisers.  Their model (at least for now) is to provide subtle marketing – one advertiser per short play video and some corresponding banner units.  They offer their video content for free and make money from marketing dollars. 

ABC’s model is different in that they will make money from consumers through a sub base – even if it is low cost.  I don’t think it will work.  Consumers have been trained to gain content online for zippo.  I don’t think they will pay to watch ABC vids.  Even with the consumer sub, ABC would play “fewer” commercials. Not a good combo.  If they are going to charge a sub, they need to eliminate commercials.  The two won’t mix well.  While Hulu is moving to a pay for model, I’m not sure that will work well either.  They are doing so as they try hard to figure out how to turn Hulu profitable.
 
Time will tell – to me, it seems the sub strategy has been tested before and it fails quickly.  The model that seems to get results is as follows:  High quality content, high quality video, massive unique impression totals and one advertiser for maximum ownership and the least amount of annoyance to the consumer possible. 

Link:  MediaPost ABC