Consumers are greatest marketing force a good television show or movie could ever have - Says Hulu CEO on Social TV

written by: Richard Kastelein

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Published on Saturday, 23 April 2011 12:31

To add onto the torrent of head-turning quotes on Social TV from high-brow thinkers continues... with Lost Remote picking up this gem from the Hulu Blog on their thoughts on the future of TV.

Late last month, the Wall Street Journal published a story that said Hulu’s owners — NBC Universal, News Corp and Walt Disney Co. — “are increasingly at odds over Hulu’s business model.”

Hulu CEO Jason Kilar published a blog post that declared that Hulu’s free service is here to stay, Hulu will “generate higher advertising returns than any traditional channel can from their advertising service,” the Hulu Plus paid service is on track this year to hit 1MM users on more than $200MM in revenue, and most interesting to us — the impact of social media. He writes:

Consumers are demonstrating that they are the greatest marketing force a good television show or movie could ever have, given the powerful social media tools at consumers’ disposal. Consumers now also have the power to immediately tank a bad series, given how fast and broad consumer sentiment is disseminated. This is nothing short of a game-changer for content creators, owners, and distributors.

Lost Remote also picked up a brilliant quote from Endemol's CEO recently:

“Everyone says that social television will be big. I think it’s not going to be big — it’s going to be huge,” Ynon Kreiz, CEO of the Endemol group, the largest independent television production company in the world, told attendees at the Digital Life Design (DLD) conference this week.

Quad that with what we covered at Appmarket.tv:

David Rowan, the Editor of Wired magazine has named Social TV at number three of six in his peek into 2011 and what tech trends to expect to get traction. Couple that with the MIT Technology Review tagging Social TV in the top 10 most important emerging technologies a few months ago and it seems we have both the tech press and academia in agreement. Social TV is a game changer - the intersection of TV and the Web will largely be driven by Social Media - it's natural. TV is inherently social - and Social Media is a conduit. Put them together in a workable, ergonomic way and the convergence will have impact.

More from the blog post at Hulu.... Consumers have spoken emphatically as to what they want and what they do not want in their future television experience, and according to the Hulu team:

• Traditional TV has too many ads. Users have demonstrated that they will go to great lengths to avoid the advertising load that traditional TV places upon them. Setting aside sports and other live event programming, consumers are increasingly moving to on-demand viewing, in part because of the lighter ad load (achieved via ad-skipping DVRs, traditional video on demand systems, and/or online viewing)
• Consumers want TV to be more convenient for them. People want programs to start at a time that is convenient for their schedules, not at a time dictated to them. Consumption of original TV episodes will eventually mirror theatrical movie attendance: big opening Friday nights, but more consumption will be in the days and weeks afterward. Consumers also want the freedom to be able to watch TV on whatever screen is most convenient for them, be it a smartphone, a tablet, a PC, or, yes, a TV
• Consumers are demonstrating that they are the greatest marketing force a good television show or movie could ever have, given the powerful social media tools at consumers’ disposal. Consumers now also have the power to immediately tank a bad series, given how fast and broad consumer sentiment is disseminated. This is nothing short of a game-changer for content creators, owners, and distributors.
• The above trends are a reality and we believe the wise move is to find ways to exploit these new trends and leverage them to build great businesses. History has shown that incumbents tend to fight trends that challenge established ways and, in the process, lose focus on what matters most: customers. Hulu is not burdened by that legacy.

And it's not all doom and gloom for content owners either. At least to Hulu:

We believe content owners are in a strong position to make higher returns from TV content distribution in the future than they have historically. If studios and networks license their content to distributors with per-user per-month economics as the model (as opposed to a fixed fee model), then they will be able to extract a higher portion of the total economics their content will generate. We state this given our belief that the majority of the US population (and a material percent of the globe) will be subscribers to some flavor of digital premium content service going forward. We also believe that any number of digital distribution companies have the ability to quickly get to scale; getting to scale is not the hard part about this business. Over the past 4 years, studios and networks have not always insisted on per-user per-month economics in their digital licensing agreements, which has resulted in a regretted under-pricing of their content to digital distributors. That said, we believe that all studios and networks will recognize that it is in their economic interest to insist on per-user per-month pricing in all their distribution relationships (library content and current content). Given the above future, we see strong upside for content owners that are laser-focused on the per-user per-month economics. A greater percentage of the pie should flow to content owners and creators in the future.

Read full blog post here.