In 2012, Hulu grew revenue 65% to reach approximately $695 million, the premium streamer said Monday. Among other factors, CEO Jason Kilar attributed the site’s success to better content and more ad partners. In 2012, Hulu grew its ad partnerships by 28%. “Our advertising service consistently sets the standard in online video advertising, including our practice to only charge advertisers when their ad has been streamed through completion,” Kilar said Monday. Throughout the year, the company also grew its title offerings by over 40%, bringing its content partners to around 430, which altogether now serve some 60,000 TV episodes, 2,300 TV series, and 50,000 hours of video on Hulu and Hulu Plus. Even more impressive, Kilar said Hulu Plus now has more than 3 million paying subscribers -- more than doubling its base year-over-year. In 2012, Hulu also said it invested more than $500 million in content. Questions about the company remain, however. Even before Providence Equity Partners officially sold its stake in Hulu in October, there was wide speculation regarding the future of the video venture, and its ability to attract quality content. Easing such concerns, CBS Corporation agreed in November to a non-exclusive, multi-year licensing agreement to stream programs on the Hulu Plus subscription service. In addition to CBS, recent content deals with World Wrestling Entertainment -- and the expansion of its partnership with Viacom to include Nickelodeon content -- suggest Hulu is moving in the right direction. Last month, comScore reported that Hulu saw its viewership number fall sharply in 2012, including a 58% drop to 65 million hours viewed in August. The research firm, however, attributed the decline to a “refinement of tag collection mechanisms,” as well as a broader enumeration change. Meanwhile, Nielsen reported that Hulu -- excluding Hulu Plus -- saw unique monthly visitors decline to 12 million in August from 19 million last December. Originally purchased in 2007 for $100 million, Providence Equity sold its 10% share back to co-owners News Corp., Comcast and Disney for $200 million last month. The deal valued Hulu at $2 billion. With the divestment, top Hulu executives whose shares have already vested should now have the option to cash out of the company. Sources told Variety over the summer that CEO Jason Kilar could cash out at close to $100 million, at which point he would likely leave the company.
Continuing to grow its footprint, the AOL On Network this week is making its app available to some 40 million Xbox Live subscribers. With the addition of Xbox 360 to the lineup of supported platforms -- including Samsung, Roku and Sony devices -- advertisers will be able to reach more users. “There is really no better validation than when a leader like Xbox turns to us to enhance their offering with our content,” said Rob DelaCruz, General Manager of Connected TV and Mobile Video at The AOL On Network. The AOL On app will give Xbox Live users access to the On Network’s library of more than 420,000 short-form videos, which includes AOL original content from properties like Huffington Post, Engadget and TechCrunch. Additional content partners include Reuters, AP, BBC, E!, ET Online, Sugar, Splash News, CNET and Martha Stewart. Launched in April, the AOL On Network brings AOL's full video offering under one umbrella, with a reach of some 75 million unique monthly visitors, according to AOL, citing comScore data. This is just the latest win for AOL and its On Network. Last month, the unit announced a partnership with online video platform Kaltura. That deal alone made around 420,000 premium videos within the AOL On Network accessible from Kaltura's open-source video platform, which is used by 150,000 companies, including Best Buy, HBO and TMZ.
The integration of online and television occur in more than numbers from organizations like the Interactive Advertising Bureau (IAB). An ad from the online site Ancestry.com took the No. 1 spot in Nielsen's ranking for the most-liked new commercial in 2012. More online companies have begun to use TV to reach audiences. Microsoft's search engine Bing turned toward the MTV Video Music Awards to introduce a campaign asking consumers to take a blind search test. It also ran the TV spot "Don't get Scroogled." Google has also run a series of TV ads. The top honor for an online company sheds light on how multiplatform approaches will shape consumer TV viewing in the future. The IAB estimates that 36% of digital video screening on mobile phones happens in a room where a second screen -- TV, desktop computer or tablet -- gets used. As for Nielsen's most-recalled ad, Subway took the No. 1 spot. The ad showed Dean Pelton giving a speech at a ribbon-cutting ceremony for a new restaurant. The No. 2 spot for the most recalled points to another Subway ad, followed by Porsche, Chevrolet, Tootsie Roll, Louis Vuitton, M&M's, Charmin, Chevrolet, and Kit Kat. Procter & Gamble Co. took the No. 1 spot in the Top 10 U.S. advertisers of 2012. The ads ranking in the Nielsen Tops of 2012: Advertising report ran between January and November. Strong creatives demonstrated a rise in spending. U.S. ad spend for the first three quarters in 2012 rose 2.5% across all media types from the same time period in 2011. Major spenders include automotive, fast food, telecom and wireless, pharma, retail, motion picture and auto insurance. The biggest advertisers by spend point to Procter & Gamble, AT&T, and General Motors. Product placement in ads making this year's top 10 integrate the brand into the story line of television programs, and most placements involved longer-term show sponsorships, which suggest that using a story line to deliver brand messages is effective in both traditional creative and branded integrations.
Last.fm is going pay-only. Spotify loses more money the more it scales. Pandora is a hot mess. The overriding reason, of course, is that digital music startups face horrible economics -- and no matter how much money investors are willing to throw at them (and how many blogs they write), that won’t change. In fact, when consumers are spending less money buying (remember that?) your albums, do ya really think that the record labels will cut you some slack with royalty payments? Are you that dumb? Anyway. The other reason, perhaps, is that YouTube is eating away at their business at the consumer end. Sure, Pandora/Spotify/Last.fm/Crapster will all win over the early adopters, but can any one of these wise people tell me why Average Joe consumer would pay anything when all of the world’s freaking music is on YouTube, for free, programmed conveniently in every imaginable playlist? Yeah, just wondering. I loved Napster because it felt so good -- because it felt so wrong (you know: how we live with cheese, wine, and other “things-gone-bad”). Well, YouTube is Napster on steroids. Bottom line: any digital music startups ought to think twice about staying in business as long as YouTube is a going concern. (Of course, as I write this, Crapster is raising $200 million at a $2 billion valuation.) Maker Studios isn’t so fuzzy So Ray William Johnson and Maker Studios are duking it out in public over… who knows, who cares. The bottom line is that Maker Studios (and fellow YouTube networks like Machinima) didn’t get so massive by being snuggly. Sure, Maker Studios’ VC Mark Suster comes across as Papa Bear, but let’s be honest: VC-backed companies (need to?) have a mob-like mentality. The problem is that the “network on top of a network” business is inherently flawed, no matter how amazing the network on which you’re building your network is (and let’s call a spade a spade here: YouTube is awesome, but most networks being built on top of YouTube aren’t). With advertising pouring money into YouTube, there’s a lot of incoming “dumb-money” in YouTube networks -- but buyer beware. This will end as well as 99% of the other online video investments have fared. Why am I telling you this? Because that’s the kind of bloke I am. Advertising is Dead. Long Live Advertising. Let’s be honest: If you got into the media business because you liked advertising, you feel kinda short-changed. The creativity, the fuzzy math, the je ne sais quoi. But with the quants turning Madison Avenue into the next Wall Street (how well is that going, guys?), it’s fair to see that advertising as we knew it is dead. Of course, by the same token, let’s be fair here: the disciplined approach and framework that technologists have brought to advertising is welcome. As Eric Schmidt stated: “Advertising is the last bastion of corporate unaccountability in America” -- but that’s what drew us to it, right? In any case, between “programmatic buying” and everything that comes with it, it’s clear that advertising as we knew it is… evolving. 2012: The year in advertising, digital video, content I'm starting to work on my end-of-year series, so chime in on what 2012 meant to you in the industry and what you think 2013 has in store for us, and I'll try to include it in my upcoming end-of-year pieces.
It’s been 48 years since the holiday stop-motion perennial “Rudolph the Red-Nosed Reindeer” first hit TV screens on Dec. 6, 1964. This year, things were looking down for Rudolph, when Deadline.com headlined that the CBS broadcast was off 28% in ratings from last year. One commenter said the special was timeworn and remake-worthy, others said that their own kids were watching on other platforms (iPad, DVD, etc.). Is Rudolph headed for the Island of Poorly Rated Specials? Still, it’s been a good run. A few years ago, we interviewed the program’s co-producer, Arthur Rankin, Jr., who filled us in on the genesis of the show and why he thinks it’s lasted as long as it has. Rudolph got his start as a Montgomery Ward store promotion. “The President of General Electric Housewares division had worked at a department store in Chicago. Rudolph, the original story, was written by one of their copywriters -- it was just a two-page story. And he remembered that and he liked the promotion. Then that little story became the song, because the composer of the song and the writer of the story were related by marriage. That was it. Gene Autry, a famous cowboy star at that time, recorded it, and it became a hit. Johnny Marks, who owned the song, was my neighbor in Greenwich Village. So I said to him, ‘That character could make a nice Christmas special.’ He was reluctant to do that, because he was receiving a good deal of ASCAP money on a yearly basis. But he finally agreed. General Electric put it on the air.” Occasionally, a song would drive the script. “Johnny Marks would write a song, like ‘Holly, Jolly Christmas’ and we would create the scene in the film to accommodate that song. That was very easy, because Burl Ives just sang it in front of a series of shots where they're building a Christmas tree…. [But] ‘Island of Misfit Toys’ he wrote because we had created [the toys] in the script. That was a dramatic situation that we created. He wrote the song to complement that. So it was both ways.” Rudolph was done in Animagic, a process Rankin discovered in Japan and later trademarked. “The figures are about eight inches tall; obviously, the Abominable Snowman is taller. Everything was in proportion. They’re made of a variety of things: plastic, cloth, wood, armature. We shot 24 frames to a second, and every movement requires one frame, so there are 24 moves per second that come out. If the picture runs an hour-and-a-half, we're talking about 150,000 moves. If there are six characters, it'd be six people, unless sometimes one person could handle two characters. The people who maneuver the dolls were like animators at a desk, they just had a different technique. It's still one frame at a time.” Those figures could act. “Remember there are people who are acting as an actor that are motivating and moving the characters. They're just like someone who was animating early Disney films like 'Snow White and the Seven Dwarves'….Those early animators would get into an early film and take over the character themselves, and draw them in front of a mirror by making faces. Animagic is very similar in that way…. Usually I was there and I would talk to them and then they would take my direction and hopefully recreate that in their character. In many cases, of course, they did. That's why they're as good as they are.” Rudolph was a girl. “The voice of Rudolph is done by Billie Mae Richards… [who] at that time was a 40-year-old woman. She had a husky voice, somewhere between a girl and a boy. It was perfect. Also, she was an established actor so she knew exactly what she was doing. We used her in other films, as the voice of young boys.” Burl Ives wasn’t the first Sam the Snowman narrator. “We had recorded the soundtrack for Rudolph with a group of voice artists in Canada, like a radio show. You do the voice track before you do the animation. But you do do the characters and the storyboards. Animation then is synchronized to how they speak. So we created their voices and told them what we wanted. We had an actor who did Sam the Snowman. Afterwards, we realized we needed and wanted Burl…. We arranged to have him rerecord all those sections. We then cut him in and took the other actor out. And we had a star.” Paging Joseph Campbell: the special has a mythic message. “When Santa leaves and goes on his big ride, he stops at the Island of Misfit Toys and picks up the toys and fulfills their desire. Earlier on, Rudolph and Hermy consider themselves misfits, Rudolph because of his nose, and Hermy because they laughed at him because he wanted to be a dentist, not making toys. And so in their trying to escape from where they were, they came upon this island and they found these characters there who are all misfits.... Kids have problems, whatever they may be. And to see other characters that also have problems, they can associate with them. And when the characters are relieved of their problems by their own actions, like Rudolph became the lead because he was very needed and he fulfilled a big role. Hermy became the dentist because he conquered Bumble. Kids love to see someone of their own stripe, their own age or their own inferiority achieve things. It makes them feel good. I think that's probably the reason these films last so long, because in all our films, that happens. The bad guy becomes the good guy at the end. He's reformed, and the underdog fulfills his quest.” To find out more, visit our show page. Happy holidays from all of us at the Archive of American Television!