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Apple’s iTunes service has brought in hundreds of millions of dollars in revenue, and is now bringing in some very stiff competition. The service, which started selling songs and is now selling everything video from movies to TV shows, is also attracting some new competition.

NBC has decided to partner with Murdoch’s News Corp to go for the big, repeat business. Although NBC has had some failed and not-so-successful business partnerships in the past (MSNBC leaps to mind), this one ought to be a winner. NBC is going to be providing TV shows and movies to audiences for free. That’s right — for free, as in no charge — nada.

NBC and News Corp are joining together to build a new empire. Through the use of their new on-line real estate, they will be publishing TV shows and movies from their own catalogs as well as those from Metro-Goldwyn-Mayer Studios, Sony Pictures Television, and more than 15 cable networks, including Bravo, E! Entertainment, FX, Sci Fi, and USA. This is going to be quite a party.

Did I mention that they’ll be free? Free, as in advertiser supported.

This advertiser/advertising supported model has worked in the past when the ads wern’t particularly intrusive. Neither NBC nor New Corp are known for their innocuous, short ads — but the kind of advertising that they get away with on TV just won’t work in the on-line world where another web site is just a click away.

The new site is called Hulu, and it is currently in beta. You can go to the site and sign up as a potential beta tester. Hulu is expected to provide what you’d get via basic cable, plus a few movies.

Not sure how good Hulu’s movies will be, just how much content they’ll get from their parterns, nor how much advertising there will be on the site, but one thing’s for sure… This service will take a good bite out of iTunes, especially if they can figure out a way to make these shows downloadable for free. Sure beats $1.99!