October 9, 2012
CEO explains why online TV is nothing to be scared of for the broadcasting industry
Online video service Hulu has been growing fast over the last couple of years, with CEO Jason Kilar appearing at MIPCOM this year to talk about that growth, but also why “we definitely should talk” – why the TV industry should embrace Hulu rather than fear it. Hence the session title: ‘Online TV and the evil plot to destroy the world’.
Kilar said Hulu’s mission is to help people find and enjoy the world’s premium content “how, when and where they want it”, engendering unabashed love from users, content providers and advertisers alike.
He went back to Hulu’s launch in 2007, which he described as the service the launch team “desperately wanted when we grew up”. The service has since expanded its footprint over those years to be available on more than 250 devices, while innovating in advertising formats.
One of those innovations: its ad selecter, where users can choose from a selection of ads to see when watching Hulu. They can also choose to change an advertisement mid-view if they don’t like it, while Hulu asks them “Is this ad relevant to you?” while they watch, with the answer feeding into Hulu’s recommendation algorithm for what that user will see in the future.
“One of the things that we feel very passionate about is a next-generation content service should be personalised,” said Kilar, describing how Hulu’s homepage surfaces videos that will be most relevant for each user, based on their past habits.
Stats? “This year we’re averaging about 30m monthly users on the Hulu service. Our Hulu Plus subscription service exceeded 2m users earlier this year… the fastest ramp to 2m paying subscribers in US premium video history, whether it’s online or offline.” And Hulu has 35% of the US premium online video advertising market.
Hulu’s revenues grew from $263m in 2010 to $418m in 2011. And 2012? “Year to date we’re actually growing faster than that,” said Kilar.
He moved on to a case study for a show called Misfits, which was broadcast in the UK by the BBC, but became something of a cult in the US through an exclusive deal with Hulu, which put the series “in front of an audience that we thought was going to care about it”.
That included recommending the show to users whose past habits indicated that they’d like Misfits, with Kilar saying Hulu has built up trust with its users in its recommendations: they do sample the shows that it suggests to them. Kilar described this as “priming the pump”, before “pouring gasoline on the fire” later with commercial breaks for Misfits in similar shows like Grimm.
“At times we get 10% of people who are shown this adding it to their queue,” he said. “In some ways it’s literally reinventing the on-air promo. We don’t just do this for Misfits, we do it for all of our series.”
Kilar suggested this was a great case study of a show that nobody in the US had heard of, finding its audience there through a partnership between its original broadcaster and Hulu. Misfits has now been optioned for a US remake. Rev, Prisoners of War and Line of Duty are also getting this treatment from Hulu in 2012.
Another case study: British political satire The Thick of It, for which Hulu is now a co-producer. “This is a show that will burn your ears, because it’s got such foul language!” warned Kilar before showing a viral clip for the latest series. “But we’re really proud of it.”
Finally, Kilar talked about a show called The Wrong Mans, which Hulu has been involved with at the pilot stage. “We’re active buyers of content from across the globe, and it’s amazing to see how fast we’ve grown from 2008 when I was standing here announcing this website… We’re not just buyers of content for the US marketplace. We’re also buyers of content for the Japanese marketplace.”
And the conclusion. Hulu currently licenses more than 55,000 TV episodes, but “we’re just getting started, and we very much should talk”. And Kilar gave out his own email address and those of his executive colleagues to hammer home that point.