Hulu An Evil Plot To Destroy The World

Topics: YouTube, User-generated content, Advertising Pages: 7 (1647 words) Published: April 19, 2015
Hulu - An Evil Plot to Destroy the World

Question 1:
List the various groups of customers that Hulu’s business encompasses. Would it be possible for Hulu’s decisions to satisfy all parties simultaneously?

Response:

The Hulu platform business model encompasses the following groups of customers.

Content Owners
Content Distributors
Users
Advertisers

Content Owners:

“Hulu is about the Content Owners taking matters into their own hands - about participating in the value created through distribution of their content” - Andy Forssell

FACTS:
July 2009 - Hulu has 170+ content partners including ABC, NBC, FOX and various independent Content Owners Many legal hurdles involved in content acquisition - Who owns what!? Hulu content contracts were NOT exclusive - Owners were free to make deals with other platforms

COMMERCE:
Equity Partners - Receive 70% of Hulu generated Ad Revenue for owned content Non-Equity Partners - Receive varying percentages of Ad Revenue for content

CHALLENGES:
Content Owners hesitant to distribute content through Hulu for fear of eroding their TV Ratings and DVD Sales Content Owners wanting to make content exclusive to their own distribution platform (own website) Cable Operators taking a “hard line” with Cable Networks by imposing restrictions and causing networks to balance a desire for online video distribution with existing business relationships

Content Distributors:

“The core idea was to bring the content to the audience, rather than forcing the audience to come to one site to watch shows” - Hulu Case

FACTS:
July 2009 - Hulu had deals with 30+ affiliated websites
Distributors enable Content Owners to connect with Users across platform Distribution Network helps Content Owners discover new viewers and monetize their content - emphasizes Hulu as connection platform 50% of Hulu traffic comes from off the Hulu website

Hulu is both a Destination Model and a Syndication Model

COMMERCE
Distribution Partners receive up to 10% of ad revenue Hulu generates

CHALLENGES
Distribution through Distributor Partners can create challenging legal and contracting scenarios about the legal use of copyrighted content

Users:

“Hulu was completely free to users (in 2009)” - Hulu Case

FACTS:
July 2009 - Users were not charged to view content - Hulu only required basic demographic and contact information to create user accounts UI designed to be simple, intuitive and focus on the content Focus on user participation and feedback

User managed experience (queues, reviewing, rating)
User sharing (ability to embed player on 3rd party websites) July 2009 - 6M players on 123K websites
User feedback response - built into Hulu culture
Hulu Labs - user Beta Testing

COMMERCE:
Completely free to Users

CHALLENGES:
Users limited in number of episodes/ seasons of a show that are available Users would prefer fewer and shorter advertisements
Users would prefer high video quality and better performance

Advertisers:

“Our goal is to complement TV and take advantage of unique attributes of online media that can make for a more targeted, interactive and effective advertising experience” - Jean-Paul Colaco

FACTS:
Hulu Advertising Strategy - Less is More
Format (Standard, Premium or Exclusive)
Strong advertising Targeting Capabilities
Reduced Advertising Load
TV: 1 Hour = 16 Min of Ads
Hulu: 1 Hour = 4 Min of Ads

COMMERCE:
CPM (Cost Per Thousand Viewers Reached) = $40 - $50
FAR exceeds TV ($20 - $40 prime time broadcast)
July 2009 - Hulu has many advertising relationships with Tier 1 advertisers such as McDonalds and Coca-Cola

CHALLENGES:
November 2008 - Hulu only filled 60% of advertising inventory Online Video advertising largely still experimental as part of an advertising campaign - relatively slow adoption TV advertising still considered the backbone of an advertising campaign Online video CPMs significantly higher than television - can serve to...
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