Hulu's Obsession With 'Every Little Pixel' Pays Off
Like the premium-content streaming platform, Starbucks rests its success on appealing to consumers' immediate impulses--and, like Disneyland, Hulu rests its success on a fanatical attention to detail and quality consumer experiences.
"We're very similar to Starbucks in that we're an impulse business," said Kilar during his opening keynote at OMMA Global on Monday. "They put (coffee) everywhere and make it easier to consume, and we try to do the same with content."
In regard to Disneyland, Kilar hearkened back to family vacations when--even as child--he would marvel at the theme park's obsession with detail and cleanliness.
"We obsess over every little pixel," he said. "I can give you a hundred examples of that," Kilar added as he showed OMMA attendees one Hulu page dominated by content for sci-fi drama Battlestar Galactica. "The last thing we wanted to do was get in the way of the show."
The six-month-old platform, co-owned by NBC Universal and News Corp., is now drawing about 8 million users per month who are consuming approximately 119 million video streams, per comScore. Industrywide, more than 11.4 billion videos were streamed online last month.
In addition, the Hulu video player has been embedded roughly 500,000 times on 27,000 U.S. Web sites, according to Kilar, through which over 90 content partners now stream their premium content.
"I love Hulu," said Geoff Ramsey, CEO of research firm eMarketer. "Hulu is a treasure trove."
According to data cited by Kilar, publishers are already reaping the rewards of their content-sharing partnerships with Hulu. Fox, a unit of News Corp., has more than tripled its video viewers since aligning with Hulu, according to Kilar.
For marketers, Kilar had three pieces of advice to best reach and engage consumers through Hulu and similar new media platform: Make good use of the tool available online, be part of a strong user experience, and leverage the power of influencers.
With regard to online tools, Hulu is presently testing an ad-serving model, which allows consumers to choose between one of three ads they would like to see with their program content.
"This allows for higher return on investment for advertisers, and users like to have the choice," Kilar said.
Sometimes, however, the most effective models are the oldest models as in the case of the "Brought to you by" messages that Hulu often features before content.
"It's very old-school, but the recall rates are very high," Kilar said. "This is about being part of a strong user experience."
To say that Hulu operates in a competitive and volatile space is an understatement. Just this month, rival Comcast reached agreements with several major content providers--ABC, CW, HBO, The Food Network, and Showtime--to offer their shows on its entertainment Web site, Fancast.com.
While Fancast launched two months before Hulu officially debuted, Hulu recorded vastly more video streams--119 million--than Fansite's 2.2 millions streams in July. This great divide is largely attributed to Hulu's distribution deals with top portals, including Yahoo, MSN, MySpace, and even Fancast itself.