Hulu.com: A New Business Model for Online Video?
Case Code: BSTR326
Case Length: 14 Pages
Pub Date: 2009
Teaching Note: Not Available
Organization: Hulu LLC
Industry: Online Video
Themes: Business Models, Growth Factors and Challenges
Abstract Case Intro 1 Case Intro 2 Excerpts
The Hulu team tried to build in features that would make the website appealing to viewers. They chose a simple look with easy navigation for the site, in contrast to the cluttered YouTube website. They also stressed developing features that everyone would find easy to use. Kilar said, "The service should be so easy to use that my mother would be proficient on it in 15 seconds or less, with no help from me."...
Hulu and Youtube
As Hulu's viewership grew, much of the initial skepticism about its success was dispelled. Many analysts had believed that Hulu would be a failure because of the divergent agendas of its various content providers and the presence of a powerful competitor like YouTube. They had also believed that Hulu would be unable to overcome the technical challenges involved in the creation of such a website. Some of them were derisive, using names like MeTooTube, Clown Co., and Would-Be-YouTube-Killer to describe Hulu...
Ending Some Distribution Partnerships
In February 2009, in a move that surprised many industry observers, Hulu suddenly ended two of its distribution partnerships. On February 17, 2009, it stopped providing content to TV.com, and two days later, it ended its partnership with Boxee.tv ...
Even though Hulu was considered to be success with an increasing number of visitors and growing advertising revenues, analysts felt that it faced several tough challenges. Some analysts felt that Hulu was not monetizing its content properly. They observed that as of late 2008, most of the ads that were being shown on Hulu were public service announcements or home rental ads...
Online video advertising was projected to grow from US$ 1.4 billion in 2008 to US$ 4.3 billion by 2011. At the beginning of 2009, Hulu was the fourth largest video distribution website on the Internet, after Google sites (YouTube, etc), Yahoo! sites, and Fox Interactive media sites (MySpace, etc)...
Exhibit I: Unique Visitors: Hulu vs. Youtube
Exhibit II: Hulu: Viewership Data
Exhibit III: Hulu's Other Competitors
Exhibit IV: Top Video Destination Websites as of February 2009
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