YouTube got some competition. Well, sort of. Online video service dubbed Hulu.com launched in beta on Monday. The site is jointly owned by NBC Universal and News Corp., and has been billed as a YouTube-killer. However, instead of user-generated content, Hulu.com offers premium content.

Hulu makes hit shows, movies, and other content available from a cadre of Hollywood's heavy hitters such as NBC, FOX, MGM, Sony Pictures Television, Bravo, E! Entertainment, and National Geographic. The content is distributed through Hulu partners AOL, Comcast, MSN, MySpace, and Yahoo. Google is noticeably missing from the distribution lineup.

"We're excited to bring a wide selection of popular content to fans, on-demand and free -- from full episodes and clips of hit shows like Heroes, House, The Office, and The Simpsons, to feature films like The Blues Brothers and Sideways," Hulu CEO Jason Kilar said in a statement.

Videos Free for All

The programs are free, thanks to advertising. Hulu's founders could be betting on the future, with online video advertising growing at a near 90 percent clip in 2007, according to eMarketer. The firm expects to see about $2 billion spent on online video advertising in 2009. That figure represents less than 3 percent of the projected television advertising spending for that same year.

However, just because traditional TV viewing dwarfs Internet video viewing doesn't mean Hulu's founders shouldn't be actively determining the appropriate business models and how to collect the appropriate metrics off the system, according to Boyd Peterson, a media analyst at Yankee Group. It doesn't necessarily mean Hulu is aiming at YouTube or iTunes, either.

"Hulu is trying to get in on a wave of growth and will worry about things like dominance a bit down the road," Peterson predicted. "Hulu will never be in a position to develop all the content that's fit to be consumed on the Internet, as good as NBC and Fox content is."

Hulu's Financial Hoops

Hulu is hoping to play a large role, though, and venture capitalists caught the vision. According to company execs, Hulu closed a $100 million investment from private equity firm Providence Equity Partners.

Beyond the sizeable chunk of financing, Hulu's growth might be buoyed by its distribution partners. AOL, Comcast's Fancast.com, MSN, MySpace, and Yahoo collectively represent some of the most visited Web destinations. Each distribution partner features a customized video player. Hulu will allow users to embed videos on their own sites to further extend distribution.

"Hulu's clean and crisp destination site, broad distribution network, and embeddable video player make for a powerful combination and will provide substantial reach to consumers online," said Jeff Zucker, president and CEO of NBC Universal.