Commentary

What's A Hulu To Do?

Two facts seem to be in conflict with each other. 1.) Entertainment is expensive to produce and advertising helps pay for it.  2.) Many young and millennial viewers dislike advertising.

That second one is a little misleading since I suppose most people would say they don’t like advertising or don’t like advertising enough to actually say they like it. But for a generation of online viewers who grew up with DVRs, Netflix and YouTube, where the advertising is optional, the idea of those commercial breaks is jarring. And besides, they may associate that advertising model with old, legacy media.

As a Roku box owner will tell you, there are lots of streaming video places that show advertising, but most of them don’t have very large followings. There are also ads on Sony-owned Crackle, which is the home of “Comedians In Cars Getting Coffee” and. . . gee, what else is on that Crackle menu?

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When TV started getting good somewhere beside HBO, it was on places like FX and AMC that broke a lot of new ground, and showed commercials. The ads, in time, became different too, and now there seems to be a separate bunch of commercials that mostly appear on ad-supported cable. It seems like a pretty good business.

But there probably can only be so many HBOs and Netflixes before wallets around America slap shut. So as streaming content grows, advertising will be a part of it.  

That’s why when some people heard Hulu might offer an ad-less, pay version (as opposed to the a few ads/inexpensive pay monthly model it already has), they were not excited by the idea, because advertisers right now would like a digital place for their ads and Hulu is it.

“They’ve certainly had a compelling proposition that they are closer to being TV than they are digital,” Pivotal Research analyst Brian Wieser told The Wall Street Journal. In this case, Wieser and many others would say, digital that looks like television is a good thing, even though online viewers might think exactly the opposite.

Advertisers--big, fat, mass-market advertisers--want someplace reliable to go in the digital space and hardly anything is safer than an online site that is mostly known for replaying network television, old and new.

It does appear Hulu is exploring every option. It’s already been free, and not as current, but with many commercials. It’s also been a pay service, Hulu Plus, with a few ads, that was an option to the original version. At the NewFronts this year, Hulu dropped Hulu Plus, but kept not fish/not fowl idea. It would be a pay service with some ads, but also at NewFronts it came out swinging with an aggressive slate of new content.

And now, if reports are true, it now seems to be considering  an all-pay version with no advertising, for perhaps $12-$14 a month, while maintaining the $7.99-with-a-few ads version.

I don’t think consumers are getting confused because all of this deep thinking is announced and analyzed only among a relatively small number of advertisers, marketers and journalists.

So to most people, Hulu right now is at status quo or what passes for that over there. But the whole wavering bit, I get it. They need the money, and they need the ads.

In that Hulu, owned by the parents of NBC, ABC and Fox, really is recreating the television experience.

Right down to the financing. It's an online content provider with a dual revenue stream.


pj@mediapost.com
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