Hulu made some big announcements at its NewFront presentation in New York on Tuesday. Hulu is jointly owned by Fox, Disney, and Comcast and was launched in 2008. At first, its content was only available on computers. Now, less than 40% of its content is viewed from computers, with viewers preferring televisions at home or mobile devises on the go, according at a recent article in AdWeek.
In an attempt to create a more focused identity, the service is doing away with the “Hulu Plus” brand, which asks subscribers to pay $7.99 a month to access more of Hulu’s TV content with fewer ads. This doesn’t mean that the paid subscription model is going away, however. To the contrary, it is doing quite well: CEO Mike Hopkins reports over 9 million subscribers—a 50% year-over-year increase. The article in AdWeek reports that, in the first quarter of 2015, streams were up 77 percent—700 million hours of premium content—with each Hulu viewer watching an average of 30 percent more content this year than last. The decision to do away with Hulu Plus simply aims to erase confusion over the difference between Hulu and Hulu Plus and create a more cohesive brand name. This may be as simple as taking the “Plus” out of “Hulu Plus” and leaving all else as is, but details as yet to be revealed.
Hulu also announced that, beginning in June, it will be the sole streamer of all nine seasons of Seinfeld. Much like Netflix’s recent acquisition of Friend’s, this $130 million contract is a very important one for Hulu given the sitcom’s longevity and popularity. Hulu has also arranged a multiyear deal with AMC to become the exclusive streaming video-on-demand service for any future shows that AMC Studios produces for AMC Networks, including the anticipated Walking Dead spin-off Fear of the Walking Dead. Hulu also secured streaming rights to one of this season’s most popular new shows, Empire.
An article in Advertising Age gives equal attention to Hulu’s upcoming plans for its original content. Mr. Hopkins stated at the NewFront event, “2015 is the year Hulu will break out,” and the company plans to achieve this through creating groundbreaking original shows. Doing so will help the company differentiate itself and put it on par with its competitors. Online video services take hope in the success of Netflix’s Dexter, Orange is the New Black, and House of Cards, as well as Amazon’s Transparent and Alpha House. It appears that Hulu will find success in 11/22/63, a drama based on Stephen King’s novel about JFK’s assassination. The series will be produced by Star Wars director J.J. Abrams and James Franco. Hulu is also releasing a comedy called Casual, a family drama called The Way, and a comedy called Difficult People produced by Amy Poehler.
The originality doesn’t stop there. Hulu reached an agreement with Cablevision to offer its subscription service to Optimum customers, making it the first cable or satellite provider to distribute the streaming service. It’s also redefining the advertising model, as ads “can’t be time shifted by a DVR,” states Senior Vice President of Sales Peter Naylor. Instead of C3 or C7, “it’s always C-right now.” This presents significant opportunities to advertisers, especially given the selectivity Hulu offers: eighty-two percent of Hulu viewers are 18-49 years old, with a median age of 33.
Naylor also announced Hulu’s plans to create 30-second commercials integrating both a marketer’s brand and Hulu’s, wanting to “create ads that viewers and advertisers love.”
From a marketing management perspective, here are some questions to consider:
- As a marketer for Hulu, would you focus on the company’s acquired or original content? Why?
- What is Hulu’s value proposition and how does this differ from Amazon’s and Netflix’s?
- How can marketers communicate this value proposition to Hulu’s target market? I.e., Viewers, ages 18-49 years old.