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Hulu: An Evil Plot to Destroy

the World?
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Established in 2007

Joint venture: NBC Universal, News Corp. (Fox), AOL, MSN, MySpace,
Yahoo! 1 of 14 hulu An evil plot to destroy the world. Enjoy.

• Website: ad-supported on- demand streaming

• Content: TV shows, movies, trailers, clips, behind-the-scenes footages


INTRODUCTION: from NBC, Fox, ABC, WWE, TBS, etc.

ABOUT HULU • Availability: Japan, U.S. and its overseas territories

• Mission: provide users the choice of TV and movie videos wherever


and whenever they want

• Advantage: strong partnership with media giants, and content license


to many of the broadcast and cable TV content

• Positioning: free or inexpensive alternative to a traditional cable or


satellite television subscription ABOUT HULU
HULU was quoted to be the largest internet video distribution network with most
sought after content

A partnership venture between NBC Universal and News Corp

Providence Equity Partners, a private equity fund joined with a stake of 10%

The idea started out of frustration- “Other people were using our videos online and
were creating a business out of it.”

HULU: A Initial Scepticism:

Journey •“Old Guys don’t get internet”


•Clown Co., Old Co. and NewTube were some of the names used to ridicule Hulu

Announced in 2007, Beta version made its debut just 6 months later

Initial reservations- “Users were in not in the habit for streaming for long duration.”

Acceptance within few time frame of launching Beta version- “Website of the Year ”,
“Happy birthday! I’m glad you guys didn’t suck”.

The awaited recognition came when a third conglomerate Disney joined as an equal
partner with NBC and New Corp.
• Objective: “Focussed on helping users find and enjoy the world’s
premium, professionally produced content when, where and how the
want it ”.

Content Owners: The content acquisition was done through 170 content partners
Hulu’s Customers
by July(2009). ABC, FOX, NBC and their partner cable networks as well as
independent partners Content
Issues: Legal rights and partners had to balance new distribution outlets with owners
existing ones( syndication, DVD’s and other outlets)

Group of
customers
Equity partners took 70% of advertising revenue generated by their content.
Challenges: Securing content
Why is it a challenge? Cable operators were giving those networks a tough Advertisers Users
time who were providing content to Hulu.
30 affiliated websites enabling content owners to connect with
users across destinations such as AOL , Facebook, Yahoo, MSN

Idea is to bring content to users rather than forcing them to visit a


specific site

Integrate Hulu’s content in site where as continuing to enjoy user

A Unique Way traffic on their website

of Content Distribution partners received upto 10% of the advertsing revenue

Distribution Decided to take a combined path of two available options-


destination site as well as syndicate

Distribution network helps user discover our content and help


content partners monetize their content

50% of traffic came from outside Hulu.com indicating the strength


of their wide distribution network
USERS
• User Experience:
• Completely free for users
• Users had to create an account by providing basic demographic and contact details
• Manage their own experience (video que, discussion boards, rating and reviewing
• Design: User experience by making it hassle free, there was no need of a plug in. Simple
website with a logo on and screenshot of their offerings
• Self-Service distribution: Common component of user generated sites. Gave users an
option to use Hulu embedded videos on their blogs and websites
• Views and Viewers
• 56% (males), 32% (18 to 34 year old)
• Monthly streams and viewers (Exhibit 5b): From April 2008 to June 2009-
1) Streams increased 4.3 times
2) Unique viewers increased 5.8 times
• Exhibit 5a- On the basis of top 10 rated US Video Streams, Hulu stood
second(share of stream almost 4%), total streaming in millions was 373. A
positive indication was the year on year positive trend in increased viewers
Video Panel Designer: Customize
May 2009: Launched Hulu Labs to
colour schemes and layouts for
experiment with new ideas
Hulu Players

INNOVATIONS: Time-based browsing: Group


videos by air-date
Recommendation's: Users
suggestions on the basis of

Hulu Labs browsing history

Hulu Desktop(downloadable sleek


Unlike regular browser, it queued
look application compatible with
up videos ad launched a video as
windows or Apple Media Centre):
soon as application was
Lean-back viewing experience of
downloaded
your personal computer
Advertisers
• Advertsing Strategy: Goal is to complement television and take advantage of the unique attributes of online media
that can make for a more targeted , interactive and effective advertsing experience
• Advertising Formats:
• Standard formal advertisements: 15-30 seconds ad spot during advertisement breaks. Advertisers also received
companion banners.
• Premium format advertisements: Enhance standard format advertisements. One option was- Brought to you by,
Presented by before the streaming of content began.
• Exclusive format advertisements: Gave user control over their advertising experience before viewing content
• Ad selector
• Branded entertainment selector: Long form of branded advertisements with no further advertisement
interruptions.
• Hulu helped advertisors in targeting customers by behaviours on the basis of data that they collected
• Hulu created a user profile that helped advertiser as well as user to get the most relevant ad-content
• Lesser Advertsing Load (typical commercial on TV- 16 minutes/ hour): Hulu had 25 % of load
• Advertsing Rates: Higher than regular TV. Estimated to be in between $40 and $50
• Hulu in November 2008 according to Screen Analyst was – Our site would generate $180 million(2008) and
$120million over 2009.
June 2009: Comcast and Time Warner

Idea: “Everyone who has a legit cable connection can view the content
online”.

Access to content was given on selected sites- Comcast.net and


TV Fancast.com, TBS.com

Everywhere Open and Non-exclusive cable : Satellite and telecom regulators free to
enter into agreements with content providers

comes into
the picture Recruited impressive set of content providers

CBS first broadcast network to pledge a range of its library content and
making it as pay-television services. This is a way to extend the television
economics online.

Hulu’s Options: Kilar-“They believed TV Everywhere was a positive development and


believed they played on a different ground of advertisement supported content($60
billion industry in US). We could consider subscription or pay-per-view model.”
THANK YOU

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