Posts for 'Hulu'

I’m pleased to present the 492nd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

This week Colin and I discuss my post from earlier this week, “Will Spinning Video Subscriptions Become a Thing?” which highlighted Hulu’s explicit offer to subscribers to switch (or spin) between its Live TV and ad-supported SVOD service. Hulu made the offer to mitigate a $10 per month rate increase it announced on its Live TV service.

Colin and I examine the pros and cons of SVOD services explicitly pitching spinning as a value proposition and whether it will take hold. Related, Colin also raises the interesting point that with the SVOD landscape getting more crowded, it might be beneficial for SVOD providers to offer smaller bite-sized on-ramps to start customer relationships (e.g. weekend passes, pre-paid credits, etc.) as we’ve seen in other industries.

SVOD is entering a significant period of transition, and from our perspectives, all ideas are going to be on the table to attract and retain subscribers.
 
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We all know about the proliferation of subscription streaming services (Disney+, Apple TV+, soon Peacock, HBO Max, all in addition to Netflix, etc.). Each service is investing heavily and wants to become a core part of our video behavior, entrenching itself as an unquestioned line item on our credit card statements.

Achieving that status is nirvana because inertia is a powerful force; once achieved, a subscriber needs to not only have an ah-ah recognition moment, but then follow it up with action to drop the service (figuring out how to do alone could be too much for many - find a cancellation link, an 800 number to call, etc.). For example, ever wonder how many people don’t check their statements closely and still pay for unused AOL dial-up service years since they’ve used it? I’m guessing it would be shocking.

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I’m pleased to present the 486th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

Colin and I were both excited to see Hulu launch a mobile video downloading feature this week. Hulu had teased the feature over a year ago. As Colin notes though, because it’s only available with the Hulu (No Ads) service and only on iOS devices, just around 15% of Hulu’s overall subscribers will gain access to downloading (at least for now).

We then discuss reports that Disney doesn’t yet have an agreement with Amazon for its forthcoming Disney+ service to be included in Fire TV devices. The deal is held up due to Amazon’s attempt to wrangle more ad inventory in Disney’s other apps. The situation is typical of the complex and sometimes competitive relationships between big media and technology companies today.

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Hulu announced yesterday that video downloading is now available for its Hulu (No Ads) subscribers. For now the feature will only work with iOS devices, though Hulu said it will be coming soon to Android users. The download feature was first teased at Hulu’s NewFront presentation in May, 2018.

Hulu said at the time that downloading would be available for subscribers to its $5.99/month plan that includes ads. Hulu’s head of ad sales Peter Naylor confirmed in his keynote interview at the VideoNuze Ad Summit this past May that about 70% of its subscribers are on the ad-supported plan. So that means only the 30% taking the Hulu (No Ads) service, which is $11.99/month will be able to use the download feature, at least for now. There was no word on whether downloading will come to Hulu with Live TV, the company’s virtual pay-TV service.

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Hulu is on the forefront of virtually every major streaming video trend, so the company’s success is a model for others to watch closely. At the 9th annual VideoNuze Video Advertising Summit on May 29th, we were privileged to have Hulu’s SVP and Head of Advertising Sales Peter Naylor as our keynote guest, who I interviewed.

Peter said that having a “viewer first” approach has been critical for Hulu. That means being respectful of the viewer experience, providing choice and control and capping ad pods at 90 seconds, among other things. Of Hulu’s 82 million monthly viewers, 58 million of them subscribe to a tier that includes ads.

Peter talks at length about his experience with advertisers and agencies and where they are on the learning curve of moving traditional TV budgets into streaming. He also cites direct-to-consumer, digital-native brands as leaders in being data and attribution focused, aligning them well with Hulu. We cover lots of other topics as well.

For anyone interested in learning how Hulu is driving change across the video landscape and what’s ahead, the interview is must-see.

Watch the interview now!

Comcast and Disney have announced a deal under which Comcast can effectively transition out of its 33% ownership stake in Hulu beginning in January 2024. The exit can occur at either Disney’s or Comcast’s instigation and at an assessed market value of Hulu that won’t be less than $27.5 billion. That means Comcast’s 33% stake could be worth approximately $9.1 billion though that could be reduced to a minimum of $5.8 billion if Comcast doesn’t fund any of Hulu’s capital needs between now and January 2024.

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I’m pleased to present the 465th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

Hulu is in the video industry’s sweet spot. A hybrid ad-supported brand-safe streaming service, now with 28 million subscribers. The best opportunity TV advertisers have to recapture young TV-watching audiences who are the biggest cord-cutters. Disney as its primary owner which itself is all in on streaming, willing to support Hulu’s land grab investments in original programming and marketing. And perhaps the biggest growth driver yet to come: bundling with Disney+ starting later this year.

On this week’s podcast Colin and I talk about all of the above (and a few challenges Hulu still faces).

If you want to learn more about Hulu’s success, come to the 9th annual Video Advertising Summit for my keynote interview with Hulu’s SVP and Head of Ad Sales Peter Naylor!

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Hulu announced this morning that it has topped 28 million subscribers, with 26.8 million paid and 1.3 million promotional (Hulu operates both ad-supported/ad-free SVOD services and Hulu Live TV but didn’t provide a breakdown). Hulu added 7.5 million paid subscribers in 2018. Viewership also intensified with average time spent per subscriber up over 20% in 2018 and total hours watched per subscriber up 75%. Importantly, 80% of Hulu’s viewing occurs in the living room.

While Netflix has become the market leader in ad-free OTT viewing,  Hulu has become the clear market leader in hybrid ad-supported premium OTT viewing. This is an extremely valuable place to be as cord-cutting accelerates and advertisers seek out viewer-friendly and targetable environments for their TV ad budgets. Hulu made a very smart move earlier this year, actually cutting the price of their ad-supported SVOD service by $2, to $6 per month, which no doubt is continuing to add to subscriber growth. A deal with Spotify announced in March to give Spotify Premium subscribers access to Hulu's ad-supported service is also likely having an early impact.

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Telaria and Hulu have released research finding that CTV advertising is helping Direct-to-Consumer (DTC) brands succeed with their marketing objectives. Importantly, the research notes that the reasons people shop DTC are similar to why they watch programming via CTVs: they care about value, convenience and choice. The implication is that DTC and CTV could create a virtuous cycle, helping the other to grow.

Examples of DTC brands include Caspar, Harry’s, Bonobos and others who create direct transactions with the buyer, primarily through mobile and digital content. DTC brands have been particularly successful in establishing brand awareness and initial scale via social media and banner ads. Jennifer Catto, Telaria’s CMO, believes they’re now primed to capitalize on CTV for big screen ads, since CTV “is accountable to perhaps more modest budgets through digital’s measurable, data and decisioning outcomes.”

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I’m excited to share that Hulu’s SVP and Head of Advertising Sales Peter Naylor will be our keynote guest at the 9th annual VideoNuze Video Ad Summit on Wednesday, May 29th in NYC. I will be interviewing Peter in a session titled, “Hulu Finds the Winning Formula by Putting Viewers First.”

Hulu has become an industry leader in connected TV and video advertising, SVOD, virtual pay-TV, original programming, digital distribution and cross-platform user experiences. Hulu now reaches over 50 million viewers with its ad-supported service, making it the largest addressable marketplace for brands in the industry.

In this keynote interview Peter will share insights about all of these topics and in particular, how Hulu’s dramatic innovation of TV’s advertising experience is driving change across the medium.

Hulu is playing a key role in every one of the top trends in the industry. It is also entering an even more consequential next chapter - becoming majority owned by Disney and a key part of Disney’s OTT strategy, moving to the front of the pack in the virtual pay-TV industry and aggressively promoting its ad-supported SVOD service by recently reducing its monthly price and also offering it at no extra charge for Spotify Premium members (moves which will contribute to Hulu generating $2.7 billion in ad revenue by 2021, according to eMarketer's latest forecast).

I’ve known Peter for many years and I’m confident his perspectives will be incredibly valuable for anyone who is trying to learn from Hulu’s industry leadership.

Save $100 on early bird discounted tickets now and double your chances* of winning a 55-inch Roku TV, generously provided by Roku.

(*Early bird registrants get 2 entries for the Roku TV drawing.)

Large corporations’ priorities are testing creative freedom as more shows than ever compete for attention in the “Peak TV” era and video becomes a critical C-level focus. Exhibit A is Apple, which according to a report yesterday from the NY Post, is vexing creators with an abundance of suggestions (or “notes” in industry parlance) on their shows. The notes, which apparently include some from CEO Tim Cook himself, tend to emphasize Apple’s desire to keep shows “family friendly.”

The goal makes perfect sense; nothing is more important to Apple than its brand image. The prospect of seeing an “Apple Original” icon in the opening credits, followed by an opening scene including profanity, violence or nudity, would be a jarring juxtaposition. Yet this is the “Peak TV” world we now live in; with so many shows competing for viewers’ time, those that are most original and creative, and yes, often include attention-grabbing early scenes, stand out (for a point of reference recall that in the first minutes of Netflix’s “House of Cards” pilot, Kevin Spacey’s character puts a wounded dog out of its misery with his own hands).

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Last week Charter, the second-largest U.S. cable TV operator, announced plans to launch “Spectrum TV Essentials,” a $15/month package of 60+ entertainment channels. According to Charter’s press release, Spectrum TV Essentials will be “made available exclusively in Charter’s footprint to Spectrum Internet customers who don’t already subscribe to Spectrum video services.” This means targeting broadband-only subscribers who have either cut the cord or never subscribed. It’s unclear how Charter will handle a prospect looking to downgrade from an existing multichannel TV bundle to Charter’s new skinny bundle (or “virtual pay-TV service,” as these bundles are often called).

Regardless, the way Spectrum TV Essentials is currently constructed/priced it is likely to have relatively narrow appeal and limited long-term value. It can be compared most to Philo TV, another inexpensive entertainment-only service. Charter has agreements with Viacom, Discovery, A&E, AMC and Hallmark to carry their networks, but NOT CBS, Disney, Fox, NBCUniversal or Turner, at least currently. So a ton of popular TV networks/programs will be missing, raising, once again the “Swiss cheese” problem of inexpensive skinny bundles that have too many holes in their programming lineups to have broad appeal. Such is the nature of striving to keep subscriber rates low; many expensive networks must be excluded.

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Perhaps the most noteworthy thing about Netflix’s solid Q4 subscriber growth was the company’s ongoing success with a pure ad-free subscription model. Netflix is becoming even more unicorn’ish among big video providers in completely eschewing ads. Virtually every other major video provider (aside from established premium TV networks like HBO, Showtime, etc.) is reliant, at least in part, on advertising (Amazon’s ad-free approach gets an asterisk because of the outsized role Prime/free-shipping still plays - and even Amazon is now integrating ads in various ways, see below).

In fact, though we’re barely a month into 2019, there are signs everywhere of advertising’s growing role in the future of the video industry.

Consider just the following:

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I’m pleased to present the 451st edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

First up this week we talk about Sling TV’s new initiative to promote third party SVOD services, including to consumers who aren’t  subscribers to its underlying virtual pay-TV service. Colin and I differ about its potential and whether Sling TV has “permission” to pursue this. We debate the upside of a separate new Sling TV initiative to provide a layer of free on-demand content. We also dig into Hulu’s new emphasis on SVOD aggregation which seems promising to both of us.

We then shift to discussing NBCUniversal’s plan to launch its own direct-to-consumer (DTC) service for non pay-TV subscribers. Colin is somewhat underwhelmed, while I think it’s a step in the right direction and too early to tell how aggressive the offer will turn out to be.  

Less than 3 weeks into the new year, it’s clear that big video providers are continuing to experiment and jockey for position.

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Earlier this week, Hulu announced stellar 2018 results: 48% subscriber growth (8 million additions), bringing year-end subscribers to 25 million. Ad revenue of almost $1.5 billion, up 45% in 2018, with 50% growth in the number of advertisers. And median average viewer age of 32, which is 25 years younger than the average broadcast TV viewer.

All of this continues to come at a huge cost; by some estimates Hulu is losing upwards of $400 million per quarter. With Disney set to assume a 60% stake in Hulu after the Fox deal closes, managing Hulu’s growth and financial performance is going to be very important for Disney. Fortunately for Hulu, Disney is highly incented to see Hulu succeed because the company is poised to play a linchpin role in what is certainly Disney’s biggest 2019 priority, the successful launch of Disney+, its new SVOD service.

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I’m pleased to present the 448th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

Continuing our tradition for our final podcast of the year, this week Colin and I discuss the top 10 video stories of 2018 - at least in our humble opinions. Once again it has been a very active 12 months, with lots of innovation and change. Colin and I have had a great time analyzing and discussing the critical industry trends each week and we hope you’ve enjoyed listening to our thoughts in 2018.

Let us know what you think of our choices, whether you agree or disagree!

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Pay-TV operators took a drubbing in Q3 ’18 as the boost the industry has gotten from consumers migrating to virtual MVPDs or “skinny bundles” mostly evaporated. According to Leichtman Research Group, the industry as a whole lost about 975K traditional subscribers (its worst ever). Subtracting estimated gains for skinny bundles the Q3 loss would have topped a million.

Going back just one quarter to Q2 ’18, the industry as a whole (both traditional pay-TV and skinny bundles) may have actually eked out a net subscriber gain, as traditional subscribers “cord-shifted” to skinny bundles. But in Q3 that short trend came to screeching halt, as both DirecTV Now and Sling TV additions slid dramatically. In Q3 ’18 the services combined to add just 75K subscribers, down from 536K a year earlier (and that’s on top of escalating subscriber losses at the core satellite services). It’s not clear how other skinny bundles performed in Q3 as they don’t publicly report their numbers.

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I’m pleased to present the 438th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

On this week’s podcast, Colin and I take up the question I explored on Wednesday, whether Comcast should divest its 30% stake in Hulu to Disney, as CNBC reported it is interested in doing. Colin and I discuss the many benefits Comcast derives from having a front row seat with 3 senior executives on Hulu’s board. On the other hand, there are many reasons why Comcast would be compelled to sell.

Meanwhile, as part of its acquisition of Sky, Comcast will also be inheriting Now TV, the innovative OTT service Sky runs. Colin shares his personal experience with Now TV and some of the specific things Comcast might learn and consider bringing to its U.S. operations. As always, rights are a central issue to surmount.

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In the wake of Comcast’s winning $39 billion bid to acquire Sky over the weekend, CNBC has reported that Comcast may be looking to swap its 30% ownership stake in Hulu (plus other consideration TBD), for Disney/Fox’s 39% ownership in Sky (a deal for Comcast to buy that was reported this morning). CNBC said that Comcast sees “only limited value in owning a non-controlling stake in Hulu” given Disney’s 60% share once the Fox deal closes.

This logic is understandable and in addition, divesting the stake would also relieve Comcast of partly funding Hulu’s losses (reportedly almost $1 billion in 2017). On the other side of the coin, Disney would own 90% of Hulu and give up its non-controlling stake in Sky as Comcast takes control of it.

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If you’re looking for more evidence of how SVOD is changing the TV landscape, look no further than last night’s Emmy Awards. The 3 big SVOD providers, Amazon, Hulu and Netflix combined to win a record 35 Emmys, up from 32 in 2017. Netflix itself won 23 Emmys, tying HBO for top honors, with Amazon winning 8 and Hulu winning 4.

Netflix’s big winner was “The Crown” which took home 5 Emmys. All of Amazon’s awards were for “The Marvelous Mrs. Maisel” including outstanding comedy series, lead actress (Rachel Brosnahan), supporting actress (Alex Borstein) and writing and directing for Amy Sherman-Palladino. Maisel tied with Saturday Night Live for second place behind “Game of Thrones” which won 9, including outstanding drama series.

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