UPDATE 2-Hulu to hit 1 mln paid users by summer's end -CEO

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Wed Jul 6, 2011 5:14pm EDT

* Prediction earlier than previous forecast

* CEO comment comes as Hulu in sales talks (Adds CEO comments on revenue, advertising)

LOS ANGELES, July 6 (Reuters) - Internet video company Huluexpects its number of paid subscribers to top 1 million bysummer's end, earlier than previously forecast, its chiefexecutive said on Wednesday.

"We are extremely encouraged by the ramp of this business,"Chief Executive Jason Kilar said on the company's blog. Hulupreviously forecast reaching that level by the end of theyear.

The company remains on track to "approach half a billion in2011 revenue," Kilar added.

Hulu is owned by Comcast Corp's (CMCSA.O) NBC Universal,News Corp (NWSA.O), Walt Disney (DIS.N) and Providence EquityPartners. The company has begun preliminary sales talks withabout a dozen potential buyers, including Google Inc (GOOG.O)and Microsoft Corp (MSFT.O), a source familiar with thesituation said last week. [ID:nN1E760169]

Hulu offers free online access to prime time televisionshows such as "The Office." The paid "Hulu Plus" service,introduced in November, offers a broader range of content for$7.99 per month. The company also makes money fromadvertising.

Hulu generated the largest share of U.S. online videoadvertising revenue in the second quarter, Kilar said.

Though Hulu is popular, its owners are under pressure fromcable and satellite companies that are reluctant to pay topdollar to carry programming offered for free on the Web.

In addition, many programmers are unwilling to put theirshows on a free site with an advertising model that has yet toprove itself with premium video.

Hulu's largest competitor is Netflix Inc (NFLX.O), whichhas more than 20 million paying subscribers in the UnitedStates. Netflix announced on Tuesday it was expanding intoLatin America and the Caribbean. [ID:nN1E7640AP] (Reporting by Lisa Richwine. Editing by Robert MacMillan andMatthew Lewis)

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