Hulu

Posted on October 5, 2014 by kdtinder

by Kay Tinder

OVERVIEW

Photo Courtesy of: technobuffalo.com

Hulu is a streaming video on demand (SVOD) service that allows the public to see clips, television series (scripted and reality), and movies virtually anywhere. Hulu offers free, ad-sponsored content as well as a membership package called Hulu Plus—a $7.99 monthly fee that gives a user a broader selection of content, lessens the burden of ads, and allows access to more platforms to view the content. Since the company is private, Hulu is not forced to disclose their financials. However, the company did announce that they reached $1 billion in revenue in 2013 [1].

Disney, 21^st Century Fox, and Comcast’s NBCUniversal share ownership in the company that has six million subscribers and has over 100,000 episodes and 5,400 films streaming [2]. The video streaming company has added more content, strengthened ties with various networks, interacted with the community, and experimented with new advertising models in order to stay competitive with ever changing new media.

NEW CONTENT

Photo Courtesy of: blog.hulu.com

James Franco released his much anticipated Saturday Night Live (SNL) documentary exclusively to Hulu’s Plus subscribers. Saturday Night started as Franco’s NYU Film School Project that gave a behind-the-scenes look at a week of SNL and the production process of a single episode [3]. Since its original film festival debuts, the documentary has received mostly positive reviews. Releasing content with such high buzz on a private service urges Hulu users to upgrade to Plus and pay a little extra to be part of the limited audience that sees exclusive content.

Photo Courtesy of: books.usatoday.com

Stephen King’s best-selling novel, 11/22/63, has just been ordered as a miniseries [4]. The Hulu Original will be split into nine, hour-long episodes. The drama follows Jake Epping, a high school English teacher, who travels through time to the late 50’s. His goal is to prevent the President John F. Kennedy’s assassination. Both King and J.J. Abrams (Bad Robot Productions) are working as executive producers, with Bridget Carpenter and Bryan Burk as writers [5]. This will also be the first time Warner Bros. Television (WBTV) and Hulu will collaborate on original programming [4]. Having big names on this project will certainly add hype to the new show and bring more traffic towards Hulu.

Casual is a straight-to-series, half-hour comedy series about a brother and sister, the first single and the latter newly divorced, who navigate the modern dating world while also raising a teenager under one roof. The ten episode, single-camera production is to be produced by Oscar-nominated director Jason Reitman and through Lionsgate Television [6]. Lionsgate adds to Hulu’s content connections while Reitman’s name and reputation bring in more customers.

Photo Courtesy of: www.projectcasting.com

ABC’s show Selfie , starring John Cho, was ordered to produce 13 episodes, but the comedy was cancelled after its seventh. Hulu decided to pick up the series and promised to release the six remaining episodes once a week, similar to its original television format [7]. It’s becoming more and more common for streaming services to save shows that are cancelled from traditional cable. Often they will finish whatever content they have produced or buy the rights and continue to produce more seasons.

Around the same time FX announced they would be streaming every the Simpsons episode ever produced, Hulu released that all 17 seasons of South Park would be available on Hulu, with new episodes available the day after they air [8]. This is just one of the many series Hulu makes binge-able while also keeping it up-to-date, a service that other streaming competitors do not provide.

Big names with a reputation of consistently producing good content litter Hulu’s upcoming shows. No doubt, Hulu’s continuous name-dropping will continue to draw people to its streaming services.

VIACOM

Photo Courtesy of: tvweek.com

Hulu has just expanded its deal with Viacom, increasing the amount and diversity of content on both Hulu and Hulu Plus. Viacom owns a diverse array of networks like Nickelodeon, Comedy Central, MTV, and TVLand. Already streaming shows like the Colbert Report, Breadwinners, and Awkward, Hulu will be adding Invader Zim, Workaholics, Spongebob Squarepants and Teenage Mutant Ninja Turtles—the final two being streamed in Spanish. They will also be refreshing already present content to include full past season of the Jersey Shore, Catfish, and many more [9]. This strengthened relationship could lead to more exclusive content in the future that would entice consumers to purchase Hulu Plus over other competitors.

APP UPDATES

Hulu has upgraded its free iOS app for Hulu Plus subscribers. Three new panels have been added to the initial screen. “Home” gives a selection of the best or popular content handpicked by Hulu. “Shows you Watch” keeps track of the shows you watch and makes them easily accessible. “Navigation” provides the categorized list of all of Hulu’s content.

Photo Courtesy of: blog.hulu.com 2

“Cast to TV” allows members to throw whatever they’re watching onto their television. Now, the new app will allow your phone to become the remote [10]. As more people turn to their phones and tablets to view content, Hulu’s refined app will serve as a plus for users.

COMMUNITY ENGAGEMENT

On October 16^th, 2014, the streaming service showed its support for the LGBT community when converting its usual green accents to purple for a day.

Photo Courtesy of: blog.hulu.com

To celebrate national #SpiritDay, Hulu highlighted LGBT-inclusive television series and films, including Ugly Betty, uncensored Sailor Moon, and Hulu Origianl East Los High—which also has an all-Latino cast. On this day, Hulu also reminded the public their partnership with GLADD, and Hulu’s ambition to have all backgrounds and cultures represented in their services [11]. Hulu is trying to show that they truly care about their audience and not just their money. They want all to feel relevant and welcome to their services.

ADVERTISING

Advertising on Hulu is affective, interactive, and integrated. Hulu has brought creative advertising techniques into their services that often leave competitors in the dust. Using choice-based ads allows the user to feel some power in what they watch and also helps advertisers target their market. Less wasted impressions means more money from advertisers, more money for Hulu, and less advertisements.

Photo Courtesy of: jinglepunks.com

Subway produced 4 to 9ers, six ten-minute episodes about high schoolers and their first part-time jobs. The main character works in a Subway and the business’s logo is in almost every frame. The integrated marketing technique was a huge hit and topped as Hulu’s most popular short-form comedy series [12]. Despite its success with unique advertising, Hulu is having some doubts.

Mike Hopkins, CEO of Hulu, is reconsidering the amount of ads shown on Hulu Plus. In December 2013, Hulu would show an average of 82.3 ads per month, versus YouTube’s 32.3 ad average per viewer [13]. Showing this amount of ads may bring in money, but is incredibly risky, especially on a service that’s paid for. If too many ads are shown, users will ditch Hulu, much like cable, and opt for a service that’s cheaper or shows fewer ads. Hulu is on the right track by constantly looking for new methods of marketing. Replacing traditional advertisements with integrated marketing, like 4 to 9ers, makes advertising seem more like content rather than harassment.

[1] http://blog.hulu.com/2013/12/18/a-strong-2013/

[2] http://variety.com/2014/digital/news/hulu-renews-viacom-deal-expanding-selection-of-nickelodeon-shows-1201341031/

[3] http://blog.hulu.com/2014/09/26/james-francos-snl-documentary-debuts-on-hulu/

[4] http://variety.com/2014/digital/news/hulu-orders-stephen-kings-112263-kennedy-assassination-thriller-series-from-j-j-abrams-1201310792/

[5] http://nypost.com/2014/09/22/stephen-kings-book-on-jfk-assassination-to-be-hulu-series/

[6] http://blog.hulu.com/2014/10/30/jason-reitmans-casual-comes-to-hulu/

[7] http://www.cnn.com/2014/11/25/showbiz/tv/selfie-hulu-episodes/

[8] http://blog.hulu.com/2014/09/26/all-seasons-of-south-park-now-on-hulu/

[9] http://www.cnet.com/news/happy-happy-joy-joy-hulu-scores-cult-toon-classics/

[10] http://blog.hulu.com/2014/10/01/introducing-the-reimagined-hulu-plus-app-for-iphone/

[11] http://blog.hulu.com/2014/10/16/hulu-goes-purple-for-spiritday/

[12] http://variety.com/2013/digital/news/subway-serves-up-second-season-of-hulus-4-to-9ers-exclusive-1200325496/

[13] http://nypost.com/2014/10/08/hulu-ceo-mulls-cutting-number-of-ads-running-on-hulu-plus/

Netflix

Posted on November 12, 2013 by Will Roth

By Will Roth

Netflix logo – courtesy digitaltrends.com

Corporate Headquarters

100 Winchester Circle, Los Gatos, CA 95032

(408) 540-3700

www.netflix.com

History

Netflix was founded in 1997 by software executives Reed Hastings and Marc Randolph. Two years later, the company offered its subscription service of unlimited DVD rentals for a monthly fee. Since its inception, Netflix has grown exponentially in terms of consumer popularity and financial revenue. Today, over 40 million subscribers consume roughly 1 billion hours of content per month through the company. [1]

Key Executive

Reed Hastings Courtesy of Netflix

Reed Hastings co-founded Netflix in 1997 and has served as its Chairman, CEO, and President since. Prior to this, he founded Pure Software, which he then sold to Rational Software. Following a stint in the Peace Corps during college wherein he taught high school math in Swaziland, he has served as the president of the California State Board of Education and remains a member of the California Teachers’ Association. [2] [3]

Financials

Netflix made its initial public offering on May 22, 2002 with 5,500,000 shares at $15.00 each. [4] As of November 15, 2013 one share sat at $349.78. The company’s all-time high was $389.16. However, it hasn’t always been a steadily increasing stock market commodity. On November 30, 2011 its price fell to $62.37. This came after the company’s decision to separate its DVD rental and streaming services. After watching the stock fall, company executives decided to abort the plan. Its stock recovered quickly and has climbed even higher than it was before the proposed change. [5]

Innovation

Netflix is a company that always seems to be ahead of the curve. After amassing 6.3 million members as a strictly DVD rental service, it launched its online streaming service in 2007. [4] After hovering around $20 per stock for years, this development started the company skyrocketing, topping out at roughly $290. This promptly fell after the announcement of Qwikster, which was the proposed streaming-only branch of Netflix. While this was a failure, it was innovative nonetheless.

Click here to watch a BloombergTV feature on Qwikster.

Netflix has rebuilt its popularity and image largely through original content.

latintimes.com

House of Cards was the first heavily advertised piece of original content from Netflix. “A Congressman works with his equally conniving wife to exact revenge on the people who betrayed him. [6]” The entire 13 episode first season was released at once so that viewers could “binge watch” it. Many analysts questioned whether this was a good business decision, theorizing that viewers wouldn’t remain hooked long enough for Netflix to prosper financially. [7] The numbers proved those doubters wrong. In the financial quarter following the show’s debut, Netflix gained 3 million new subscribers. In that quarter alone, the company made back its money on the program in which it had invested $100 million. [8] The show received 9 Emmy nominations and won for Outstanding Casting, Directing, and Cinematography in a Drama Series. [9]

pcmag.com

Netflix also found success in its debut of the fourth season of the cult hit Arrested Development. Executives attributed the bump of 630,000 new subscribers in the second quarter of 2013 to the show’s dedicated fan base. [10] The season earned three Emmy nominations. [11]

In addition to original content, Netflix has been innovative in customizing the user experience. In 2006, the company announced the “Netflix Prize,” which would award $1 million to the person or team who came up with the best algorithm to accurately give entertainment recommendations based on personal preference. Three years later, they had received submissions from more than 40,000 teams from 186 countries. [4] The prize was awarded in 2009, but the company never implemented the algorithm. According to Netflix, the “additional accuracy gains that we measured did not seem to justify the engineering effort needed to bring them into a production environment. [12]“

Also in the vein of user experience, Netflix recently added the option of multiple profiles to its streaming service. Chief Product Officer Neil Hunt acknowledged that most accounts are shared, usually within one household. In an effort to tailor recommendations to each user specifically, customers can now specify who is watching. The service is free of charge and will also help Netflix in collected more accurate user data. [13]

Competition

One might assume that Netflix is a competitor with cable providers. CEO Reed Hastings has a different view. In a letter to investors, he outlined his company’s main areas of focus moving forward, breaking down its competition into two categories. The first is “competitors-for-time,” meaning entertainment options that do not bid against Netflix. While markets may not overlap between Netflix and video game providers, sports networks, and piracy, all of those options eat up consumer time that could be spent watching Netflix. The other category is “competitors-for-content.” The largest competitor here is HBO. Hastings discloses that the companies have bid against each other for movie licensing and original content in the past, and that they seem to be pushing each other to be better consumer-oriented services. Hastings also lists Amazon, Hulu and others as competitors-for-content. At the same time, he believes that there will be enough room for everyone. “Many consumers will subscribe to multiple services if they each have unique compelling content. [14]

On The Horizon

Netflix plans to build upon its success with original content. It has renewed each of its original shows for second seasons, and has expressed desire to make another season of Arrested Development as well. “[We would] be delighted to produce a fifth season of Arrested Development, if possible, given fan reaction.” The company also plans to produce its own full-length documentaries and comedy specials and stream them exclusively. [15]

There is also speculation that Netflix is pushing for day-and-date movie releases, meaning that it could begin streaming a film the same day it premieres in theaters. Though Netflix has not confirmed this, theater owners are wary that the development could put them out of business. Ted Sarandos, Netflix’s Chief Content Officer, accused theaters of refusing to adapt, saying “not only are they going to kill theaters — they might kill movies.” Currently, theaters have a 90 day exclusivity deal, wherein films cannot be shown anywhere else for three months. But recent studies state that theaters make 96% of total revenue from a film’s first six weeks. At the very least, we can expect Netflix to cut the amount of time between theatrical releases to streaming down to between 30-45 days. This would spell greater profits for both Netflix and movie studios while only trimming 4% of theaters’ revenue. [16] At the very least, we can expect an innovator like Netflix to be on the forefront of the entertainment business in the years to come.

Sources

[1] About Netflix

[2] About Reed Hastings

[3] Reed Hastings Profile – Bloomberg Businessweek

[4] Netflix Company Timeline

[5] Nasdaq

[6] House of Cards imdb

[7] Variety Binge Watching

[8] The Atlantic Wire

[9] Emmys – House of Cards

[10] Huffington Post Tech

[11] Emmys – Arrested Development