Case Study Essay Essay

Speed Racer. Like millions of otherwise kids, he couldnt wait to watch the heros slick Mach 5 sheets on villainous rivals in equ aloney enticing race cars. The read came on at 330 p.m. If he was late, he bewildered it. Back then, there were no VCRs or DVRs to record the specify for by and by viewing. There was no Internet. Like everyvirtuoso else at the time, Kilar had to watch TV on the schedule dictated by the ne t imprints.Perhaps thats why when Kilar grew up, he denounce kayoed to change that antiquated model of television notice. By the time Kilar had reached the ripe disused age of 36, home-recording devices had been househ grey-headed fixtures for well everyplace two decades. however as far as Kilar was concerned, having to think onwards and passel a device to record a show was sleek over too much work. Thats why accepted the task of race federal agency Hulu, a joint venture by media giants NBC Universal and News potentiometer that serves upTV shows and movie s through a slick Web interface, when and wherever you want to view them. As Hulu began to take shape, speculation quickly sullen to skepticism.Whats a Hulu? In August 2007, this question ricochetedthrough the blogosphere to a chorus of derisive laughter. NBC and discombobulate News bay windows TV broadcasting subsidiary were way out to make the Internet safe for television They were building a YouTube grampus And they were c each(prenominal)ing it Hulu It was al around too perfectan absurdist topper to the idea that two major broadcast networks could devise an Internet exposure service deal would actually use.The name was even more(prenominal) delicious than the ventures placeholder moniker, NewCo, which the online world had changed to ClownCo.And now Hulu? It means snoring in Chinese, one blogger declared. Cease and desist in Swahili, Michael Arrington reported on TechCrunch. Perhaps they should chip in just stuck with ClownCo, he added.In Mandarin, hulu actually means b ottle gourd, or holder of precious things. and the words meaning doesnt really matter much. What does matter is that since Hulu aired its first television chopine in March 2008, it has become the thirdmost-viewed online video site, and its lighten rapidly growing. Entertainment Weekly called Hulu some kind of TV surcharges fever dream. One of the same bloggers who had earlier ridiculed Hulu soon pronounce it brilliant. And Mr. Arrington, coeditor of the famed blog TechCrunch and one of Hulusharshest early critics, ultimately declared, zippy over. Hulu wins. The big question is this Of all the worlds Web startups and video sites, what has made Hulu such an instant and unquestioned success?Focus On the CustomerWhen Jeff Zucker, CEO of NBC Universal, and Peter Chernin, death chair of News Corporations Fox network, hired Jason Kilar, they handed him a relatively empty canvas in an persistence mired with complexities. Kilar could start out set any of a thousand different prioriti es in creating Hulu. But Kilar focused first on one primary priority that would guide the entire venture the viewer. He insisted that Hulu be obsessed with users. If Hulu didnt work for viewers, they simply wouldnt crinkle in. Kilar wanted to capture the dress hat parts of watching television the oldfashioned way and combine them with the best that modern technology could offer. He and his Hulu police squad considered all the barriers to watching television and movie schedule via the existing options and then set out to squash them.Hulu is Web based, so it overcomes two of the most familiarinconveniences to watching regular TV Its visible(prenominal) 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 race away from their TV sets to watch their darling shows online, Hulu had to offer more. So Kilar and his team focused on some very specific benefits.User-friendly The top Internet servicesGoogle, Flickr,YouTubeearned their top spots because theyre simple. Hulu demand to do more than just claim user-friendlinessits site rented to be clean, clutter-free, and have exalted-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 parapet had limited the success of many online video services. Kilars test for restraint? His 62-year-old momma, 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 standard for a TV-watching experience. It has optimized all of the ingredientsquality of video, navigation, and controls. films stream almost instantly in high resolution on a large or even full phase of the moon filmdom, instead of a postage-stamp-size screen with grainy video, as Kilar puts it. What does Kilars mom think? She talks a big game, but shes non technical, give tongue to Kilar. But when Maureen discovered how easy it was to pull in up episodes of the old TV classic Alfred Hitchcock Presents on Hulu, she was hooked.A Ton of Content Kilar besides k bran-new that slick and easywouldnt be enough without having programming that sightwanted to see. When nursen the initial list of programs thatwould be available on Hulu, Kilar was very disappointed. It was one piece of paper, he said. I wished it was a hollo book.CC1CC2Company CasesKilar informed the gurus at NBC and Fox that for Hulu to work, the two companies needed to reserve 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 gain legal dynamic headroom for everything that they could.To give viewers even more content, Kilar suggested a strategy to Fox and NBC executives verged on heresy.He wanted to show programming from competing networks and productioncompaniesto trade in the competitions products. In fact, he wanted Hulu to be comprehend as its own entity, not tied to any existing network. Hulu is to the highest degree 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 film studio apartment Lionsgate. Inaddition to hosting content on its own Web site, Hulu thinkseamlessly to video content on other video sites, even those of competing networks. In the time since Hulu began ai ring programs, the number of content partners has swelled to 130 and its subroutine library has grown exponentially. That library includes full episodes and even full seasons of television programs, clips from shows (clips of NBCs Saturday Night Live are among the most viewed on the Internet), movies, and even instructional Web videos such as How to Make Stuffed Crust Pizza.Cost (as in Free) Kilar also knew that for Hulu to succeed, it had to be free. After all, thats how people had been watching broadcast television for decades. And on the Internet, people have come to look for free. But offering free content created a problem. Such programming had to be supported with ads, andviewers dont like those either. So Hulu created a veryreasonable compromise.The standard for broadcast television is ogdoad minutes of ads per half-hour of programming. Huluinserts only two minutes of ads per half hour. abandoned all that they get, viewers dont seem to mind the drawing interruptions. Gre at Quality, User-based Programming, and EmbedCodes A great video player and lashings of free programs arethings that viewers want most. But in his drab pursuit to please viewers, Kilar went even further. He went for first-class quality, in two 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 alone moves a show up in the ratings. As a result, some rather odd shows have go up to the top. One of mosthighly rated shows on Hulu is Its Always jovial in Philadelphia, an FX series starring Danny DeVito. Another is Arrested Development, a cult favorite that won Emmys andcritical acclaim but was canceled by Fox because of miserableratings.In yet another Is this guy crazy? move, Kilar decided that Hulu should show embed codes so that users could postcontent on their own sites. not only does Hulu featu re content from the competition, it gives its own content away Users bang this because they can share programming 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 nextHulus focus on pleasing viewers is certainly cover 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 clever ad featuring 30 Rocks Alex Baldwin on Super Bowl XLIII, the sites viewership increased 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 bumpkin (with 353 million streams) and number two MySpace (with 462 million streams). A few months later, Hulu passed yokel 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 verydi fferent from Hulus, so Hulu lays claim to existence the market leader for TV-oriented sites.Despite its success in such a short time, Hulu s future is hardly guaranteed. Consumers are fickle, especially in a world of constantly changing technologies where whats hot like a shot 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 get out one of the biggest competitors of all viewers themselves.A major reason that NBC and Fox created Hulu in the first place was to battle 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 threatening to inflict the same equipment casualty on thetelevision industry that the likes of Napster inflicted on the music industry.Shortly after their initial plans leaked out, Cher nin addressed the piracy problem head on. You cant protect old business models artificially, he proclaimed. Unlike music industry executives who held back far too long, Chernin and Zucker realized that if they didnt put their shows online, soulfulness 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 while the minds at Hulu notion that their product will doa great deal to combat piracy, they are more concerned about a bigger break 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 the industry. The world has turned completely acme down. I find 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 Discussion1. 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 central the societal marketing concept. Is Hulu sustainable? Support your conclusions for each consideration.4. What recommendations would you make for Hulusfuture?SourcesJessi Hempel, Hulus Hurdles Internet Video Sharing post 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 confront TV, Wired, September 22, 2008, accessed online at www.wired.com Chuck Salter, The Fast Company 50 3 Hulu, Fast Company, March, 2009, p. 59 Lynne dJohnson, In Only One Year, Hulu Becomes Fourth-Largest Video Site in U.S., Fast Company, March 23, 2009, accessed online at www.fastcompany .com.