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CMGT 543: Hulu Case Study

A comprehensive overview of one of the largest streaming TV services.
by

Raquel Zsupnik

on 22 April 2016

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Transcript of CMGT 543: Hulu Case Study

A Case Study by Raquel Zsupnik
What I'll Be Discussing...
What is Hulu?
Brand History
Market & Competition
Content
Value Proposition
Business & Revenue Model
Sales, Subscriptions & Advertising
Acquisitions & Partnerships
Case Study: The Path
Leadership & Organizational Structure
Company Culture
Strategic Media Analysis and Recommendations
By The Numbers...
Who had this great idea?
A premium streaming TV service offering thousands of hours of the best television programming and movies to subscribers
Why was Hulu created?
Where is Hulu available?
Hulu was built on a simple concept: provide Americans legal & free content whenever and wherever
Quickly transformed viewing experience through shortened & personalized ads
What are other U.S. viewers watching?
How do these competitors stack up?
"Netflix is not our competitor. People's free time is our competition. Video games, dare I say going outdoors... We're competing with how people are spending their time."


David Baron,
VP of Content
Hulu gets content at a faster rate, giving them an automatic fan base from parent companies.

However, this serves as a double-edged sword for traditional viewing audiences.
Competitive Reach
Source: Statista
32%
32%
36%
Because Netflix is offered in various international territories, they are able to expand global content rights.
Steady Growth in Subscriptions
Source: Statista
In 2016, Hulu is on track to bring in...
$1.7 billion
From 2013, this is an upwards growth of...
70%
Source: Wall Street Journal, 2015
"People familiar with Hulu's financials say it has yet to reach substantial profitability." - WSJ
Why??
Over the past few years, Hulu has received about $750 million in loans from parent companies
Content Strategy
With competitors in mind, Hulu is becoming aggressive in seeking new content
Source: Wall Street Journal, 2015
750,000 per episode
Spending vs. Competitors
Then and Now
Oct. 29, 2007
Hulu Beta launched
2009
split between Newscorp, NBCU, Disney, & Providence Equity
2010
Hulu Plus subscription debuted
2015
Hulu debuted
no-commercial subscription
July 2013
Hulu up for sale by parent companies, then taken down
Sept. 2008
became 6th top content provider
(142 mil streams,
6.3 mil vis/month)
Who is running Hulu?
Mike Hopkins,
CEO
Tim Connolly,
SVP, Distribution
Craig Erwich,
SVP, Content
Chadwick Ho,
SVP Counsel
Tian Lim,
CTO
Jim O'Gorman,
SVP Talent & Org
Peter Naylor,
SVP, Sales
Elaine Paul,
CFO
Ben Smith,
SVP Experience
Jenny Wall,
SVP Marketing
How is Hulu organized?
Mike Hopkins, CEO
Technology
Content
Finance
Experience
Sales
Counsel
Distribution
Marketing
Talent &
Organization
Case Study of Original Content:
The Path
Premiere Date: March 30th
Streamed weekly
Season 1: 10 episodes
Distribution Rights: Hulu/Universal TV
Creator: Jessica Goldberg
Executive Producers: Universal Television & Jason Katims' True Jack Productions
Hiring Practices
"We've seen an incredible amount of growth.
Just last year we hired about 400 people.
Now we encompass about 1200 total. We
hire internally when appropriate, but overall
we aim to hire from diverse backgrounds."
-David Baron, VP of Content
Company Culture
"We have roots in start-up culture, which is why we define ourselves as work hard/play hard. On our wall of photos, each image represents one of us. Our CEO is seen crumbling up a business suit in his photo. He came from Fox."
-Marketing Employee
Disrupting the Industry
"We've always had one foot in both sides of the industry - entertainment and tech. Essentially, we've always been about offering a service that goes above the norm."
-Creative Advertising Employee
http://www.cnbc.com/id/100883300
http://blog.hulu.com/2007/10/
http://www.investopedia.com/articles/markets/031116/streaming-wars-netflix-vs-hulu-vs-apple-tv-nflx-aapl.asp
https://ditm-twdc-us.storage.googleapis.com/2015-Annual-Report.pdf
http://deadline.com/2015/09/hulu-growing-8b-asset-hidden-wall-street-1201560776/
http://www.investopedia.com/articles/personal-finance/121714/hulu-netflix-and-amazon-instant-video-comparison.asp#
http://old.seattletimes.com/html/businesstechnology/2011517934_bthulufuture05.html?syndication=rss
http://techcrunch.com/2014/04/30/hulu-now-with-6-million-subscribers-will-make-some-tv-episodes-free-on-mobile/
Hoover Report: http://subscriber.hoovers.com.libproxy2.usc.edu/H/company360/competitorsList.html?companyId=159434000000000
http://www.forbes.com/2009/01/22/hulu-amazon-newscorp_leadership_clayton_in_rc_0121claytonchristensen_inl.html
http://www.investopedia.com/articles/investing/092414/economics-hulu-netflix-redbox-and-blockbuster.asp
http://www.investopedia.com/articles/personal-finance/121714/hulu-netflix-and-amazon-instant-video-comparison.asp
http://www.gadgetreview.com/netflix-vs-hulu-plus
http://www.marketingcharts.com/online/us-ott-video-service-user-forecast-2014-2019-59841/attachment/emarketer-us-ott-video-service-user-forecast-2014-2019-oct2015/
http://www.digitaltrends.com/home-theater/which-makes-networks-more-money-hulu-vs-netflix-and-more/
http://www.wsj.com/articles/hulu-steps-up-its-fight-against-netflix-1434497311
http://www.wsj.com/articles/SB10001424127887324879504578601840989680844
http://www.wsj.com/articles/comcast-role-in-aborted-hulu-sale-raises-questions-for-regulators-1429660758
http://www.hulu.com/press/executives
http://www.hulu.com/press/about
http://www.hulu.com/advertising/sponsorship/summer-tv-on-hulu/
http://www.hulu.com/jobs/what_defines_hulu
http://www.statista.com/statistics/258014/number-of-hulus-paying-subscribers/
http://www.nielsen.com/us/en/insights/reports/2015/the-total-audience-report-q4-2014.html
http://decider.com/2016/03/31/hulu-female-showrunners/
http://www.theverge.com/2016/3/31/11337678/nickelodeon-nascar-hulu-dailymotion-windows-10-xbox-one
http://www.cnet.com/news/eyes-on-with-hulu-for-gear-vr/

References
With a subscription, where can you watch Hulu?
Advertising Analytics
Hulu insights prove viewers spend the most time viewing content through TV sets
Consultancy in research gives advertisers highest ROI
Source: Hulu Advertising
Advertising Effectiveness
Hulu Sees Steady Growth
Source: eMarketer
Managing Technological Change
Creativity
and
Innovation
Cognition,
Culture
and
Strategy
Leadership
"Media organizations producing ad-supported media operate in a dual-product marketplace: they produce content and provide audiences to advertisers." (p.10)
"Creativity leads to the creation of a new product or service. Innovation is the successful implementation of these creative ideas." (p.149)
Creativity + Consumer Need =
Competitive Advantage
(p.145)
"Cognition often surfaces in connection with
problems faced by sectors of the media in
coping with environmental change." (p.167)
"A leaders vision drives strategic action,
especially when seeking to achieve
transformational change." (p.206)
Netflix is still ahead... For now
Original content amongst wide array of genres
Binge-watching by season
$9.99 Netflix plan > $7.99 Hulu plan
Mailed DVD's, value
Full transcript