Just a few years ago Hulu, the online television site, was something of a novelty. A lot of people knew about it and watched it, but it was just another website. That all changes this week as Hulu participates in “upfronts”.
Hulu is in this position because of some staggering numbers:
- Revenue of $420 million in 2011 (compared to $263 million in 2010)
- 38 million visitors/month
- 1.5 billion video ads shown to viewers in February
- 2 million subscribers for their $8/month service
This all adds up to a gamechanger for the industry. The studio heads who originally created Hulu want to kill it, or at least sell it. They know that it’s taking away viewers from traditional television and offering better advertising:
“On a one-to-one basis, advertising placed on Hulu for our clients was more effective than advertising placed on television for the same programming,” said Steven J. Farella, chief executive at TargetCast TCM.
Additionally, Hulu collects vastly more data on viewers and can offer ads specifically targeted to them.
“Stoking envy among traditional television executives, the Web site collects a trove of data on its users’ preferences in programming and ads.”
At this point, it’s too late for the studios sell or kill it, though they did try all last year. Instead, they are inviting it to the table to see if it can compete on its own. Which means participating in the full cycle of television from pilot episodes, to full series, and selling all that to advertisers.
The most critical point being the “upfronts”:
At a presentation on Thursday in New York, Hulu, will pitch advertisers on original programming in an annual ritual known as upfronts that are typically reserved for cable channels and network broadcasters.
Hulu executives are expected to take the stage to sell advertisers on new series. The executives will also promote the service’s desirable demographic of young viewers who turn to Hulu for popular network sitcoms like “New Girl” and “Family Guy,” available only after they are broadcast on Fox.
So, like Netflix, Hulu is making a push into original series. It has also licensed 13 television shows that will appear exclusively online.
Traditional television is still the dominant game in town, but Hulu and Netflix are at the table now, and they have the internet on their side. With offerings like on-demand, full series at once, mobility, fewer commercials, and lower prices, you can expect all of this to quickly change the balance of power.
read more about upfronts at the NY Times