Hulu Success

Since launching in late 2007, Hulu has grown considerably in terms of content, user numbers, advertisers, and stature. Most people, at least in the U.S. will now be aware of Hulu at the very least, even if they rarely or ever use the service.

There does seem to be trouble brewing, with the Wall Street Journal reporting that NBC, News Corp., and Disney are effectively re-evaluating their positions within Hulu as they fear the company is drawing viewers away from their own separate sites and therefore affecting business.

However, to listen to Hulu CEO Jason Kilar you’d get the impression that everything is right with the world.

A Strong Future?

Kilar recently gave a keynote speech at the IAB (Internet Advertising Bureau) Annual Leadership Meeting in California. According to AdWeek, it was during this keynote that he predicted the company would bring in $500 million in revenue in 2011 from a combination of advertising spend and paid subscriptions for Hulu Plus.

He also boasted that the company now has 627 advertisers and 250 content partners on board. This is in stark contrast to the two content partners and around a dozen advertisers Hulu started out with.

If Kilar’s revenue prediction for the year proves to be correct then Hulu will have doubled its revenue from 2010. Over the course of its life the company’s revenue have jumped year on year, quadrupling from $25 million in 2008 to $108 million in 2009, and then more than doubling to $263 million in 2010.

Conclusions

Kilar appears to be confident, indeed overtly positive, about Hulu’s future. at least in public. But with the company being so reliant on its content partners to have anything its users, many of whom now pay for the privilege, the longterm looks a little rocky for Hulu.

Hulu

Hulu has gone from strength to strength since launching to many cries of derision from certain sectors of the television industry. It has built a well-known brand, a huge audience, and an army of advertisers eager to sell their wares to a switched-on Web TV-viewing public.

Hulu ended 2010 on a high, with record numbers of viewers and people signing up to its subscription-based Hulu Plus service. The latter being despite the $7.99-a-month asking price not getting rid of all the ads.

A new report from comScore shows just how much Hulu dominated proceedings in the U.S. in 2010.

Hulu Thrashes The Networks

Throughout the course of the year Hulu easily beat the viewing times of the websites of all five major television networks combined. Which isn’t too surprising but intriguing to note nonetheless.

In the fourth quarter, viewers racked up an impressive 19.4 billion minutes of video watched on Hulu. On the websites of ABC, CBS, NBC, Fox, and the CW, a further 9.7 billion minutes of video was watched.

In terms of growth its the individual websites which are doing well, with 82 in Q4, while Hulu could only manage 17 percent growth. Taken together there was a 33 percent growth in the number of minutes watched on these premium websites.

Conclusions

The networks don’t seem to know what to do about Hulu. They know they need it and gain viewers and revenue from it, but they’d still rather people headed to their own individual websites so they could control everything to the nth degree.

[Via TechCrunch]

Cord-Cutters Unite

According to a new survey from J.P. Morgan’s Imran Khan (via MediaMemo), 2011 is set to be a bumper year in terms of the number of people cutting the cord.

28 percent of those with a cable or satellite TV package stated they would consider switching to online video. If you replace “would consider” with “are considering” then this is a startling result. 63 percent of these people wouldn’t even be put off by the lack of live sports available on the Web.

Netflix appears to be the main source of this confidence in cutting the cord, with 47 percent of all active Netflix streamers stating they are considering making the move.

Khan consequently calls this move “a consumer-driven Tsunami.”

Cable Companies Denials

Flying fully in the face of the mounting evidence that cord cutting is real and is happening, cable companies and others continue to deny its existence. Comcast claims anyone dropping their service is just reacting to the recession, while Nielsen had the temerity to brand the whole thing “a myth.”

I guess it’s natural for an industry facing a struggle to retain its customers to try and mask the truth. There’s an obvious fear that admitting such a revolution is afoot could result in even more people checking out the alternatives and choosing one over cable.

But at the end of the day burying their heads in the sand isn’t going to get them far.

Conclusions

Cable companies need to admit the truth while forming a strategy for retaining their customers or adapting their businesses to stay relevant in the Web-lead world we now inhabit. Otherwise they’re destined to lose control like the major record labels have done.

Hulu Plus

A paid-for version of Hulu was expected for a long time, and the company duly delivered in June 2010. Hulu Plus was envisioned as an addition rather than a replacement to the free, Web-based Hulu, and an invitation-only beta began.

After fine-tuning the service, the invitation system was dropped a couple of weeks ago as the company prepared to move it out of beta. Today, the beta officially ended, and with it came news of a price cut and special offers designed to lure people in to giving Hulu Plus a go.

Price Cut, Special Offers

In a post on the official Hulu blog, Jason Kilar announced the end of the beta and the beginning of what the company hopes will be a new future for the paid-for service.

First and foremost the monthly asking price has dropped from $9.99 to $7.99. Not a momentous cut, and not the cut many of us were hoping for (to $4.99 or $5.99) but still a 20 percent reduction going forward. Which shouldn’t be sniffed at.

In addition to that, there are special offers: one weeks free trial for all new subscribers, two weeks free trial for both parties in a referral, 11 weeks free trial (the equivalent of $20) for anyone purchasing a Sony Bravia TV or Blu-ray player, and one month free for anyone purchasing a Roku box, which Hulu Plus is now available on.

Conclusions

The fact there’s been any movement on pricing is positive, because it means Kilar has persuaded the networks involved in Hulu that this was a necessary step. Maybe the price will drop further as more people sign up to the service and the value of Hulu Plus becomes clear.

However, for now I’m not convinced $7.99 is going to be a big enough draw, especially with advertising still being a part of the service.

Hulu On The Up

Hulu defied the cynics and survived past its first year. But it did much more than just survive, instead becoming one of the most popular online video services in the U.S., the most popular in terms of delivering on-demand, catch-up television.

Hulu has succeeded not only by enticing viewers in, but also by keeping on the good side of the networks and cable companies; a task obviously made easier by the fact that it’s run by three of the networks themselves.

However, this strategy seems to be working, with viewer numbers up and profits climbing.

Hulu Statistics, Profit Forecast

During the NewTeeVee conference in San Francisco last week, Hulu CEO Jason Kilar displayed a slide clearly showing how the company has grown since it launched three years ago.

At the end of October, Hulu boasted:

• 30 million monthly users
• 260 million content streams
• 800 million ad streams
• 352 ad partners
• $240 million in revenue in 2010 (estimated)

The last statistic is especially interesting. The $240 million in revenue compares to $25 million in 2008 and $108 million in 2009. So Hulu is ramping up its profitability credentials. Hulu Plus must surely be helping.

Adverts, Content Suggestions

Kilar also spoke about advertising and his belief that Hulu is actually serving its viewers better than broadcast television in this regard. His argument is that an interactive platform provides viewers with more chances to offer feedback, and that feedback can then be used to tailor ads in the future. There are also other alternatives, such as watching a full-length movie trailer, or completing a short survey.

The other interesting subject Kilar covered was that of content suggestion. Hulu is currently testing out a feature where at the end of a show the viewer will be directed to a similar show – it works very much like the ‘People who bought this, also bought…’ on Amazon. And people are responding, with a 10 percent click-through rate so far.

Hulu Plus

We knew a paid-for version of Hulu was coming more than a year before the company actually decided to unveil its plans. Rupert Murdoch, chairman of News Corp. was the first to raise the idea, and from there it was always going to happen.

Hulu Plus, as it eventually came to be called, finally launched at the end of June. As expected, it was an addition rather than a replacement to the original, free, advertising-based Hulu America has come to know and love.

The monthly fee of $9.99 doesn’t get rid of the adverts (which is a mistake in my opinion), but it does offer several advantages over its free cousin. Mainly that it makes Hulu available on more devices and adds fulls seasons of shows both new and old.

Now Open To All

Hulu Plus began as a service only available to those invited by the company. This is a common policy so as not to overwhelm the infrastructure of a new service in its early days of operation.

However, in a blog post on Thursday (Nov. 4) Hulu Plus Product Director Rob Wong announced a relaxation of this invitation-only policy, with everyone who wants to now invited to sign up to Hulu Plus.

Hulu Plus is now also available on Sony Bravia TVs and will soon be available to all PS3 owners. Up to now, Hulu Plus has only been available to Playstation Plus (which is Sony’s paid-for, premium PSN service) subscribers.

The question now is whether enough people will be tempted to pay the $9.99 monthly fee to make Hulu Plus a worthwhile product.

Conclusions

For me, Hulu would have been better served reducing the price of Hulu Plus to $4.99- or $5.99-per-month or at least removing the advertising. That would surely entice a much larger amount of people into signing up for the service.

It’s not that $9.99-a-month isn’t a fair price for the service being offered, especially when compared to the amounts people pay for cable TV. But to truly get people interested and signing up in their millions Hulu will have to lower the price sooner rather than later.

News Corp. Vs. Cablevision

News Corp. and Cablevision are currently locked in a battle over retransmission fees in the New York area.

Cablevision currently carries local stations owned by Fox and its owner News Corp. Proprietor one Rupert Murdoch Esq. But News Corp. is trying to up the retransmission fees paid by Cablevision, and that contract dispute has seeped over into the online video sector.

Caught in the middle is Hulu, which is co-owned by News Corp. as well as by ABC and NBC Universal.

Online Video Used As Weapon

As first noted by All Things D on Saturday evening, News Corp. had taken the unprecedented step of trying to prevent Cablevision customers from accessing its programming via either Fox.com or Hulu. Cablevision customers were instead faced with the following message:

Hulu’s PR rep stated:

Unfortunately, we were put in a position of needing to block Fox content on Hulu in order to remain neutral during contract negotiations between Fox and Cablevision. This only includes Fox content. All other Hulu content is accessible to Cablevision Internet subscribers. We regret the impact on Cablevision customers and look forward to returning Fox content to those users as soon as possible.

In other words, Hulu didn’t want to do this but was put in a difficult position by News Corp. bosses as they tried any means they could to disrupt Cablevision’s operations, thereby forcing the latter’s hand into agreeing to new terms.

Thankfully, News Corp. came to its senses after a few hours and lifted the ban on Cablevision customers wanting to watch shows via the company’s own website or Hulu. Mainly because customers were apoplectic with rage and expressed these views on the Web.

Conclusions

This shows how important online video has now become, because this is the first time access to online content has been denied due to one of these frequent contract renegotiations.

News Corp. acted out of line, obviously, but the FCC (Federal Communications Commission) is likely to pull the company up on this. Meanwhile, New York’s Cablevision customers should once again be looking forward to catching the next episode of Glee on Tuesday.

Hulu – From Zero To Hero

Before Hulu launched late in 2007, no one seemed to give the company much hope of succeeding. Here were old media companies, which had shown a complete disregard for online video and an inability to understand its finer points, attempting to move in on the emerging market.

Such was the feeling that this was a venture destined to fail, YouTube employees allegedly began referring to Hulu as “the clown company.”

Three years later and Hulu has proved itself to be no clown. Instead, it has a good relationship with content owners, a dedicated userbase, a pay service in Hulu Plus, and is rumored to be about to go public. What’s more, it’s valued at an astonishing $2 billion.

Going Public

Hulu is reported to be preparing to go public, with a deal valuing the company at around $2 billion which would bring between $200 million and $300 million into the company’s coffers. Morgan Stanley will be chief underwriters on the deal.

Hulu is set to file a prospectus with the U.S. Securities and Exchange Commission before the end of 2010, with the IPO itself taking place in the first half of 2011. This is, at least according to sources close to the company.

A decision about whether to plough ahead with this plan is due in November, and it’s likely to hinge on whether Hulu is able to renew the rights to carry some of its big-name shows, some of which end in the next year.

If the IPO does go ahead then the up-to-$300 million raised would be used to acquire new content and potentially move in to territories other than the U.S. Which has been planned for some time but keeps stalling.

Conclusions

I’m quite surprised Hulu is valued at such a high figure but it does have a very sound business at its core. The big problem for Hulu is that it is facing stiff competition from Apple, Netflix, and others. Hulu clearly wants to make sure it’s leading from the front rather than playing catchup.

[Via Reuters]

Hulu Plus

Hulu Plus, in case you’re wondering, is the premium, paid-for, subscription service newly offered by Hulu. We knew it was on its way months before any official details were revealed.

Hulu Plus finally launched at the end of June, with the $10-per-month service designed to sit happily alongside the free Hulu.com website.

Hulu Plus brings Hulu to a whole range of devices beyond the computer, with the PS3 and Xbox 360 games consoles, and the Apple iPad and iPhone early recipients.

However, as great as all this sounds, what do you actually get for your money? Research firm One Touch Intelligence decided to find out at this very early stage in the life of Hulu Plus.

Hulu Plus Content Analysis

The good news is that there are 28,418 episodes available through Hulu Plus. The bad news is that just 3,564 of these are Hulu Plus exclusives, with the other 24,854 also available on the free-to-watch Hulu. This equates to 88 percent of full episodic content. For clips, the figure rises to 98 percent.

The main reason for subscribing to Hulu Plus is, it seems, to gain access to more episodes of the shows which are already on Hulu.com. The only notable shows which are exclusive to Hulu Plus are Law and Order, My Name Is Earl, Prison Break, and 8 Simple Rules.

Whether these two bonuses – a few extra shows and a few thousand extra episodes of existing shows – is enough to persuade people to pay up remains to be seen.

It is important to note, however, that Hulu is likely to keep adding content as time goes on, with two months clearly not long enough to make any serious conclusions

Conclusions

At present I can’t see Hulu Plus subscriptions being a big seller, with more reasons to sign up needed. However, ABC, NBC, and Fox aren’t likely to give up before giving this a serious shot, and giving the content line-up a serious shot in the arm.

Hulu – Only In The U.S.

I’m sure if you, like me, live outside the borders of the United States, you’re well aware that Hulu is off-limits, restricted, not available.

It’s not that Hulu has anything against us, you understand, but the networks and channels which provide Hulu with its content don’t want us to be able to view programming we haven’t yet paid for in one way or another. Which is understandable, if not very, very annoying.

I’ve moaned about the issue of international rights licensing, arguing it’s something that needs to change in order to better fit in with the Web and its worldwide userbase. But nothing will get done all the while there is big money at stake.

Which means we have to find our own way or bypassing the system. For some it’s piracy, for others it’s using proxies or VPN services. But there is another way, which is genius, and which works. Amazingly.

Hulu Workaround

A very simple yet effective way of being able to watch Hulu outside the U.S. was discovered by how-to-hide-ip.info. I’ve been testing it for the past 24 hours and can confirm it works as it should do.

All you need to do is install the Firefox Web browser, then install the Modify Headers plugin to Firefox. Next, click Tools in Firefox, and then click Modify Headers.

A new window will appear, and after clicking Add in the drop-down menu enter the line ‘X-Forwarded-For’ in the first box, ‘12.13.14.15′ in the second, and leave the third blank.

Finally, click on Configuration and make sure Always On is checked. Then you can go to Hulu.com and watch video content to your heart’s desire no matter where you live.

N.B. Don’t blame us if this method either doesn’t work for you or if it affects your computer/browsing experience in some way. It worked for us, and we haven’t yet noticed any ill effects yet.

Conclusions

This is great for those of us outside the States, but not so great for Hulu. Especially coming, as it does, just a few days after PlayOn released a Web app enabling Hulu to be viewed on an iPhone or iPod Touch.

I fully expect this loophole to be closed at some point so make the most of it while you can.