Can Hulu Find Its Mojo With Viewers?

(See Corrections & Amplifications item below.)

As it prepares for its debut, online video site Hulu.com faces a number of challenges to attract viewers and advertisers to what is fast becoming a crowded market.

Hulu, a joint venture between News Corp.'s Fox and General Electric Co. GE -1.79 % 's NBC Universal, is expected to officially launch as early as tomorrow, according to people familiar with the matter. The two companies have invested a huge sum in the site and haven't always had a friendly relationship.

Hulu has been in a private beta form since October. The company declined to comment on the launch date or provide any data on viewership or advertising from its beta period.

Hulu, which carries content primarily from its parent companies' television and film properties plus limited offerings from a handful of others, plans to unveil new content partners this week. The site has been holding negotiations with Time Warner Inc. TWX 1.38 % and Viacom Inc., VIA 4.33 % according to people close to those talks.

But some content providers still are tentative about making their shows available through Hulu. The company signed limited-distribution agreements with Sony Corp.'s Sony Pictures Television and Metro-Goldwyn-Mayer Studios Inc., MGM -0.63 % but neither of the other two major broadcast networks, Walt Disney Co. DIS -0.25 % 's ABC or CBS Corp.'s CBS, has signed on to distribute content through Hulu.

"The question as to whether or not CBS is going to join Hulu is as relevant as asking whether or not Disney is going to join CBS," says Quincy Smith, president of CBS Interactive. "You're arguing to be a premium destination in a time when nobody wants a destination."

Many viewers aren't in the habit of visiting destination sites for streaming, long-form video, preferring to watch short clips on Google Inc.'s YouTube or download full episodes from Apple Inc. AAPL 0.53 % 's iTunes.

General Motors Corp. GM -1.53 % will advertise with Hulu at its debut. GM, which already buys ad time on the TV networks, says running ads next to the online content was a natural progression for the auto maker.

While Hulu's size pales next to that of some other online video sites, including YouTube, the content is safe and predictable, GM says. "User-generated [content] just sort of runs the gamut in terms of quality," says Betsy Lazar, GM's executive director of advertising and media operations. "Quality content is [the networks'] forte, so it is just a different avenue for us to pursue."

Hulu is hardly alone in trying to become the go-to site for movie and TV content online. In the past 18 months, all the broadcast networks have stepped up their online-distribution efforts, pursuing different strategies in hopes of stemming piracy and making money from the spike in the popularity of Web video.

Advertising through online video still is largely experimental for marketers. Market-research companies expect it to grow to about $4.3 billion by 2011, up from roughly $1.4 billion this year.

CBS has pursued a more open, nonexclusive model, pushing its content through many outlets. ABC has opted for a "walled garden" approach, closely guarding its content by limiting the outlets that carry it and keeping shows confined within an ABC-branded video player.

Other video-aggregating sites, including Veoh, Joost and Sony's Crackle, have grown up in recent years hoping to capture the lion's share of the online video audience.

Also in the mix are the major portals, including AOL, MSN and Yahoo, who collect and stream video from wide spectrums of content creators and studios.

Hulu has a two-tiered distribution structure: The site aims to be a destination for free, streaming, ad-supported television shows and films as well as a syndication service, distributing that content across the Web through partnerships with AOL, Yahoo, MSN, MySpace and others.

Executives from NBC Universal and Fox announced the formation of Hulu in the spring of 2007, saying they would spend about $100 million to create a competitor to YouTube and an online hub for their television shows, which also are available on each network's home site. In late summer, private-equity firm Providence Equity Partners invested $100 million for a 10% stake in the site.

To boost the size of their audience, most of the networks have linked up with the Internet portals to syndicate their content. The result is that many of the major sites, including AOL, MSN and Yahoo, have similar content. Visitors to Yahoo, for instance, can find content from the major networks and Hulu, along with movie studios, major sports leagues and news outlets such as ABC News, CNN and Fox.

AOL hosts content from a number of networks, including NBC, ABC, CBS, Fox, Bravo and USA. The Web sites are trying to compete by concentrating on the user experience with different tools such as search, chat, recommendation and commenting.

Dow Jones & Co., publisher of The Wall Street Journal, is owned by News Corp.

Write to Rebecca Dana at rebecca.dana@wsj.com and Emily Steel at emily.steel@wsj.com

Corrections and Amplifications

A previous version of a chart that accompanied this article for Web traffic data incorrectly included traffic for a number of NBC Universal's networks, including NBC.com. Alone, that network received 42.8 million streams and two million unique U.S. visitors in January, according to Nielsen Online.