Case Study Essay Essay

Speed Racer. Like gazillions of other kids, he couldnt wait to watch the heros slick Mach 5 take on villainous rivals in equ completelyy enticing race cars. The render came on at 330 p.m. If he was late, he missed it. Back then, there were no VCRs or DVRs to record the show for later viewing. There was no interlocking. Like everyone else at the time, Kilar had to watch TV on the schedule dictated by the networks.Perhaps thats why when Kilar grew up, he wane show up to change that antiquated model of mental picture recording ceremonial occasion. By the time Kilar had reached the ripe old age of 36, home-recording devices had been syndicate fixtures for well over two decades. that as far as Kilar was concerned, having to think ahead and set a device to record a show was lock too much work. Thats why accepted the task of running Hulu, a joint venture by media giants NBC Universal and News mountain that serves upTV shows and movies with a slick entanglement interface, whe n andwherever you want to view them. As Hulu began to take shape, speculation quickly turned to skepticism.Whats a Hulu? In August 2007, this question ricocheted by means of the blogosphere to a chorus of derisive laughter. NBC and Fox News Corps TV broadcasting subsidiary were going to figure out the Internet safe for television They were building a YouTube killer And they were calling it Hulu It was almost too perfectan absurdist beaver to the idea that two major broadcast networks could devise an Internet video service battalion would rattling use.The name was even more delicious than the ventures placeholder moniker, NewCo, which the online world had changed to Cl takeCo.And now Hulu? It doer snoring in Chinese, one blogger decl atomic number 18d. Cease and desist in Swahili, Michael Arrington reported on TechCrunch. Perhaps they should clear just stuck with ClownCo, he added.In Mandarin, hulu actually means bottle gourd, or holder of precious things. But the words meaning doesnt really matter much. What does matter is that since Hulu aired its initiative television program in March 2008, it has become the thirdmost-viewed online video turn up, and its still rapidly growing. entertainment Weekly called Hulu some kind of TV addicts fever dream. adept of the same bloggers who had foregoing ridiculed Hulu soon pronounced it brilliant. And Mr. Arrington, coeditor of the famed blog TechCrunch and one of Hulusharshest early critics, ultimately declared, Game over. Hulu wins. The bouffant question is this Of all the worlds Web startups and video stations, what has made Hulu such an instant and unchallenged success?Focus On the CustomerWhen Jeff Zucker, CEO of NBC Universal, and Peter Chernin,president of News Corporations Fox network, hired Jason Kilar, they handed him a relatively empty canvas in an industry tortuous with complexities. Kilar could induct set any of a thousand different priorities in creating Hulu. But Kilar focused offshoot on on e primary priority that would guide the entire venture the viewer. He insisted that Hulu be haunt with users. If Hulu didnt work for viewers, they simply wouldnt tune in. Kilar wanted to capture the best parts of ceremonial occasion television the oldfashioned way and combine them with the best that modern technology could gap. He and his Hulu team considered all the barriers to watching television and movie programming via the existing options and then set out to squash them.Hulu is Web based, so it overcomes two of the most commoninconveniences to watching regular TV Its usable 24/7, and .it doesnt require that viewers set a device for recording. But all Web video sites offer those advantages. Beyond these basics, to ultimately draw people away from their TV sets to watch their favorite shows online, Hulu had to offer more. So Kilar and his team focused on some very specific benefits.User-friendly The top Internet functionGoogle, Flickr,YouTubeearned their top spots because th eyre simple. Hulu require to do more than just claim user-friendlinessits site needed to be clean, clutter- leave office, and have high-quality video. The site needed intuitive controls and navigation tools. And it needed to work seamlessly with all the popular Web browsers, without requiring additional downloads or special players.That obstacle had limited the success of many online video services. Kilars test for simplicity? His 62-year-old mom, Maureen, had to be able to cue up any video on the site within 15 seconds. As a result, Hulu emerged as the sleekest, easiest-to-use,and most professional video site on the Internet. According to Will Richmond, president of research firm Broadband Directions, Hulu set the gold prototype for a TV-watching experience. It has optimized all of the ingredientsquality of video, navigation, and controls. Videos stream almost instantly in high resolution on a large or even full secrecy, instead of a postage-stamp-size screen with grainy video, as Kilar invests it. What does Kilars mom think? She talks a big game, but shes not technical, say Kilar. But when Maureen discovered how easy it was to pull up episodes of the old TV classic Alfred Hitchcock Presents on Hulu, she was hooked.A Ton of Content Kilar also knew that slick and easywouldnt be enough without having programming that peoplewanted to see. When endown the initial list of programs thatwould be available on Hulu, Kilar was very disappointed. It was one spot of paper, he said. I wished it was a phone book.CC1CC2Company CasesKilar informed the gurus at NBC and Fox that for Hulu to work, the two companies needed to provide access to every moviethey had ever made and every show they had ever aired. Thenetwork chiefs explained that existing contracts and legalcomplexities made that virtually impossible. But Kilar held his ground, and NBC and Fox quickly came around, digging deepto cumulate legal clearance for everything that they could.To give viewers even more field of study, Kilar suggested a strategy to Fox and NBC executives verged on heresy.He wanted to show programming from competing networks and productioncompaniesto sell the competitions products. In fact, he wanted Hulu to be perceived as its own entity, not tied to any existing network. Hulu is roughly the shows, not the networks, Kilar argued.The shows are the brands that users care about. Once the idea settled in, Chernin and Zucker agreed.As a result, when Hulu went live, it boasted more than 250TV shows and 100 movies from Fox, NBC, Universal, their affiliated cable channels, and more than 50 content partners such as Warner Brothers and indie moving-picture show studio Lionsgate. Inaddition to hosting content on its own Web site, Hulu linksseamlessly to video content on other video sites, even those of competing networks. In the time since Hulu began airing programs, the number of content partners has bragging(a) to 130 and its library has grown exponentially. That librar y includes full episodes and even full seasons of television programs, clips from shows (clips of NBCs Saturday darkness Live are among the most viewed on the Internet), movies, and even instructional Web videos such as How to develop Stuffed Crust Pizza.Cost (as in Free) Kilar also knew that for Hulu to succeed, it had to be idle. After all, thats how people had been watching broadcast television for decades. And on the Internet, people have come to expect free. But offering free content created a problem. Such programming had to be supported with ads, andviewers wear offt homogeneous those either. So Hulu created a veryreasonable compromise.The standard for broadcast television is eight minutes of ads per half-hour of programming. Huluinserts only two minutes of ads per half hour. Given all that they get, viewers dont calculate to mind the brief interruptions. Great Quality, User-based Programming, and EmbedCodes A great video player and lots of free programs arethings that viewers want most. But in his relentless pursuit to please viewers, Kilar went even further. He went for first-class quality, in both selection and viewing.Hulu relies on a small army of film students to screen every minute of footage,looking for video and audio glitches. And instead of havingHulu executives set programming priorities, Hulu lets users do it. Popularity only if moves a show up in the ratings. As a result, some rather odd shows have risen to the top. One of mosthighly rated shows on Hulu is Its Always Sunny in Philadelphia, an FX serial publication starring Danny DeVito. Another is Arrested Development, a cult favorite that won Emmys andcritical acclaim but was canceled by Fox because of poorratings.In yet another Is this guy crazy? move, Kilar decided that Hulu should provide infix codes so that users could postcontent on their own sites. Not only does Hulu feature content from the competition, it gives its own content away Userslove this because they can share pro gramming with others. It works for Hulu because it doesnt really give the content away. It enables its videos to go viral, bringing more viewers tosponsors ads.Embracing the FutureHulus focus on pleasing viewers is certainly showing results. In only a few months, Hulu ranked among the Webs top-tenvideo sites, besting even ESPN.com. The month followingHulus airing of a very minded(p) ad featuring 30 Rocks Alex Baldwin on Super Bowl XLIII, the sites viewership change magnitude by 55 percent to 7.8 million with 332 million streams. This catapulted Hulu past Microsoft and Viacom,putting it at the heels of number-three Yahoo (with 353 million streams) and number two MySpace (with 462 million streams). A few months later, Hulu passed Yahoo In the world of online video sites, YouTube still dominates with 5.3 billion streams every month. But the market offerings of YouTube and MySpace are verydifferent from Hulus, so Hulu lays claim to creation the market leader for TV-oriented sites.Des pite its success in such a short time, Hulu s upcoming is hardly guaranteed. Consumers are fickle, especially in a world of constantly changing technologies where whats caustic today may be old news next year. NBC and News Corp recentlyadded Disney and its ABC library to the partnership. But numerous other user-friendly, TV-style sites lurk in the shadows, including CBSs TV.com and Viacoms Joost.And dont forget one of the biggest competitors of all viewers themselves.A major reason that NBC and Fox created Hulu in the first place was to combat video piracy. They were constantly having to intervene to pull clips of their shows off of YouTube and other video sites.And peer-to-peer BitTorrentnetworks were menace to inflict the same damage on thetelevision industry that the likes of Napster inflicted on the music industry.Shortly after(prenominal) their initial plans leaked out, Chernin addressed the piracy problem head on. You cant protect old trade models artificially, he proclai med. Unlike music industry executives who held back far too long, Chernin and Zucker realized that if they didnt put their shows online, someone else would. The best way to combat piracy is to make your content available, said Zucker. We want to make sure consumers know they dont need to steal our content. Thats what Hulu is all about.But man the minds at Hulu feel that their product will doa great deal to combat piracy, they are more concerned about a bigger issue Giving the consumer everything they want may not always be the best thing for the business. From a profitability standpoint, the impact of makingcontent available with minimal commercials could have adverse effects on thebusiness models that have worked for decades. As viewershipCompany Casesturns from the TV to the Web, can the revenue generatedthrough the new media replace that which will undoubtedly be lost through the old?Jason Kilar himself best captures the opportunities andthreats presented by the volatility of th e industry. The world has turned completely upside down. I convey that very inspiring. Others might be scared out of their wits. But to me, this is the way media always should have been.Questions for treatment1. Describe Hulus market offering in detail. What value is Hulu really offering to users?2. Is Hulu customer-driven? Why or why not?3. Think about the three considerations underlying the societal marketing concept. Is Hulu sustainable? championship your conclusions for each consideration.4. What recommendations would you make for Hulusfuture?SourcesJessi Hempel, Hulus Hurdles Internet Video Sharing point Tries to Serve Fans and Networks Alike, Fortune, February 24, 2009, accessed online at www.money.cnn.com Frank Rose, Free, Legal, and Online Why Hulu is the New Way to Watch TV, Wired, September 22, 2008, accessed online at www.wired.com toss Salter, The Fast Company 50 3 Hulu, Fast Company, March, 2009, p. 59 Lynne dJohnson, In Only One Year, Hulu Becomes Fourth-Largest V ideo Site in U.S., Fast Company, March 23, 2009, accessed online at www.fastcompany .com.