In the summer, nothing beats a trip to the movies. I don’t have air conditioning, so the movie theater provides a welcome relief from the heat and a cheap two hours of entertainment. Not to mention the fact that there is something comforting about a huge blockbuster with a big audience and greasy popcorn.

Alas, the summer blockbuster season is drawing to a close and analysts are saying that the season was something of a bust for the big studios, with ticket sales down from where they were a year ago – I guess G.I. Joe and Funny People just didn’t cut it. Despite the blockbuster flops, it seems that the independent movie industry has been flourishing. Arthouse divisions of the major studios like Fox Searchlight and Focus Features have been rapidly gaining market share over the last few years. Movies from no-name studios have also been gaining broader distribution in the mainstream as social networking and online video have opened up new advertising opportunities.

Given that niche films often attract viewership through online channels/communities you might expect that they would dominate the online space. To find out if this assumption holds, I took a look at searches for movies that were released between May and July of this year. I categorized each movie as either a major studio release (Warner Brothers, Paramount Pictures, Columbia Pictures, Universal Studios, 20th Century Fox, and Walt Disney Pictures), a major studio’s arthouse release (Paramount Vantage, Sony Pictures Classics, Focus Features, Fox Searchlight, and Miramax Films), or an independent release. I then tracked the search volume for each category from January through July.

Despite the online buzz around Indie flicks, it looks like the big budget studios still win out by a long shot in terms of search volume, but where do their searchers end up? I took a look at the destinations of movie searchers for that same time period to find out.

The chart above shows destination domains of movie searchers. The “official movie site” category represents the studio’s official site dedicated to the film in the search query. A few points stand out:

• Major studio releases are the only films that attract more searches to their official sites than any other pages – perhaps because they have more money for search optimization or simply that they spend more on overall marketing.
• Regardless of the type of film IMDB is attracting a very large percentage of the searches. Major studio arthouse film searches have many more referrals to IMDB than any other type of film. This could be an intentional marketing decision that the studios have made in an effort to make their films appear more ‘indie.’
• Independent film searchers end up on YouTube more often than either major studio arthouse or major studio searchers but they end up on the other large sites less often than the other two film types. This could be because most of their searches send them to smaller sites that are farther down the tail and there is enough variation in the destinations that none of the sites show up in the top 10.

As long as independent movies continue to gain traction on sites like YouTube and Facebook, odds are good that before too long they may be able to rival the large studio releases as far as online presence goes. For now, we’ll have to suffer through as films like Transformers and G.I. Joe top the list both in ticket sales and search volume.

I’ve never paid for cable. It’s not that I don’t enjoy TV. I do enjoy it, perhaps a little too much, which is why I’ve always thought it better to steer clear of cable and satellite services. For a while I led a happy existence – reading books, frolicking in the sunshine, and maintaining a marginal degree of intelligence. Then Hulu came along with its “evil plot to destroy the world” and things changed. Hulu offers free TV shows and movies from a multitude of networks and studios with crisp pictures and minimal advertising. These days I spend much more time watching online video than I should.

Apparently, I’m not the only one who enjoys Hulu’s free services. Hulu may be becoming more of a brand online than ABC, NBC and Fox, the big broadcast networks that own shares of it.

As shown in the chart below, traffic to hulu.com overtook all three networks for the first time in June. The networks’ traffic declined during the summer rerun season, but Hulu seems relatively unaffected.

So how has Hulu managed to draw people away from the networks that produce the content and supposedly hold the loyalty of consumers? To find out, I took a look at compete.com’s Search Analytics reports.

The chart below shows the percent of overall search traffic driven by term categories:

• The network name category includes any term that has the name of the network in it (i.e. “nbc tv” or “hulu video”)
• The show name category is any search term that refers to the name of a show (i.e. “family guy episodes”)
• The free content category refers to any search term that contains the word ‘free’ (i.e “watch free tv”)

The data point to one big reason for Hulu’s success: branding.

• Hulu has been more successful in developing its brand with online video. Over half (56%) of Hulu’s search traffic in June was driven by branded searches for Hulu’s name, whereas only 17% of Fox’s traffic and 14% of NBC’s search traffic were driven by searches for the networks’ names.
• The networks have been more successful in attracting viewers searching for specific shows with 43% and 34% of NBC and Fox’s search traffic, respectively, coming from terms relating to show names.
• Hulu is attracting searches for free content while the networks are not. This suggests that Hulu has been more successful at marketing itself as a site for free TV, while the networks may be struggling to convey that they are also offering free access to their shows.

For the major networks, this means that it makes more sense to advertise specific shows than the network brand itself. For Hulu, the biggest takeaway is that is has successfully created a brand as a site for aggregated, free online content.

There have been rumors floating around that Hulu may start charging for content bundles. Some have argued that peer-to-peer file sharing still poses significant competition in the online content space and that too many outlets for free content already exist.

This my be true, but with Hulu’s successful branding, it may be able to make the transition to paid content simply by offering some added value and convenience – maybe portable content that the user could put on multiple devices to rival iTunes’ DRM. For now the question remains: will people who don’t pay for cable be willing to pay for online content?

The online channel, originally considered a threat to the music and movie industries, has become an increasingly important distribution channel. Over the last several years, we’ve seen more and more industry-sanctioned content download sites. Services like eMusic, Napster (the legal version), Rhapsody, and iTunes have grown their inventories and membership. At the same time, companies that used to peddle hard copies of their respective media are turning to the online retailers.

I’m a big fan of the hit AMC TV show “Mad Men,” but I’m not a cable subscriber, so I usually turn to the internet to stay up to speed. Sure, I could pay $2.99 to download last week’s episode from iTunes. Or I could use one of the many P2P sites and download the same content for free. I know there are many who would prefer the free route, but I think that it’s much easier to download from iTunes than it is to search high and low across the internet for P2P content. When do users use P2P and when do they use industry sanctioned sites?

To learn more about how consumers use paid content together with free content, I divided online media sites into two categories: industry-sanctioned and P2P. For the industry-sanctioned category I looked at paid services like Rhapsody, eMusic, Napster, Amazon, plus free streaming sites like Pandora, last.fm, and Shoutcast. In the P2P category I looked at 13 Torrent sites (free content delivery) and Limewire.

The chart below shows how traffic to P2P sites compares to traffic to industry sanctioned sites.

• Traffic to industry sanctioned sites climbed 60% since August 2007, while traffic to P2P sites has been holding steady over the same period
• Still, P2P sites’ get more visitors, with an average volume was roughly 8.5 million unique visitors per month, compared to only 6.3 million on industry sanctioned sites

Why the growing interest in industry sanctioned sites? It might be the convenience factor. Content can be tough to find or of sub-par quality when downloaded with P2P. For only $0.99, you could hop on iTunes and download a tough to find song instantly, rather than sifting through junk and spam on a P2P site.

If convenience is driving media sales on industry sanctioned sites, these sites could continue to grow and succeed. P2P sites are likely not going anywhere though, and even as the music and movie industries find success with new distribution models, they will need to find creative ways to coexist with free content.