Hulu Case
Autor: zenius92 • September 4, 2015 • Presentation or Speech • 490 Words (2 Pages) • 940 Views
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Q.4 . What are the underlying economics of Hulu versus that of broadcast and cable television?
Specifically, how do the revenues per hour-long program compare across television and
Hulu?
Hulu’s goal as mentioned by Colaco was to complement television and take advantage of the unique attributes of online media to make advertising more tageted, interactive and effective.
The Underlying Economies of Hulu
- Hulu offered three types of advertising formats to the advertisers as
- Standard format which gave 15 – 30 seconds video spots that ran during breaks
- Premium format with “Brought to you by…” messaging and various canvases.
- Exclusive formats with two further options of ad selector and branded entertainment selector as :
- Ad selector which gave users choice between two or three advertising options providing exclusivity and priority to user experience
- Same with the case of entertainment selector which enabled users to choose to run a long ad before the content or during the content again giving advantage to both users as well as advertisers(Movie studios).
- Hulu gave the option to thumbs up or down the ad as in regular television settings ads couldnot be skipped or fast forwarded.
- Hulu allowed advertisers to target segments of customers based on the demographics, geographies, behaviors etc. which increased relevency and efficiency for advertisers.
- Hulu carried less ads than traditional television ie. In one hour of broadcast, television had 16 minutes of ads whereas Hulu had just 25% load ie. 4 minutes.
They believed in “less is more” approach which means by innovative formats, targeting users, and lesser advertising load they would result in higher engagement leading to higher effectiveness as shown in Exhibit 9.
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