Hulu: an Evil Plot to Destroy the World?

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How does Hulu's business model and value proposition differ from the traditional broadcast media and YouTube? Hulu’s business model is essentially the same as that of traditional broadcast networks. Both offer professional content and generate revenue through advertisements based on audience volume (some broadcast networks have license fees). However, Hulu’s value proposition differs significantly by enabling users to watch content when, how, and where they want. YouTube also generates revenue through advertising, primarily through the small percent of premium videos on its site (advertisers tend to stay away from user-generated content). In contrast, all of Hulu’s content appeals to advertisers. Hulu’s value proposition also differs significantly from that of YouTube. While both are online video sites that aggregate the content of other sources, YouTube provides a platform to upload, share and view short videos and contains primarily user-generated content (and unauthorized copies of copyrighted content). In contrast, Hulu is professionally created and provides full-length, legally sourced, premium television and video content.

How does Hulu serve consumers, content owners and advertisers? Do the needs of these different groups converge? Hulu serves it consumers by providing a large library of premium, professionally produced content and enabling them to view the content when, where, and how they want with a much lower advertising load than traditional television. Hulu’s site design is user friendly: intuitive, free of clutter, and easy to navigate, play video, and share content. Users also play a prominent role in shaping the site on an ongoing basis. Hulu serves content owners by providing a distribution channel for them to grow their audience. Hulu also gives them a share of the advertising revenues generated by their content, allows them to make content distribution agreements with other sites, and enables them to connect with users across other...
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