Sunday, September 21, 2008

Hulu's Successful Distribution Model

"We're very similar to Starbucks in that we're an impulse business. They put (coffee) everywhere and make it easier to consume, and we try to do the same with content.

-Jason Kilar, CEO of Hulu

In Gavin O'Malley, "Hulu's Obsession With 'Every Little Pixel' Pays Off," Online Media Daily, September 19, 2008

Co-owned by NBC Universal and News Corporation, Hulu is an advertising-supported service that streams "premium content"--that is, professional programs from cable and broadcast television networks. The six month old firm has substantial competition; Joost (with CBS as a major investor) and Fancast (owned by Comcast) are two examples. Yet, according to Gavin O'Malley, "while Fancast launched two months before Hulu officially debuted, Hulu recorded vastly more video streams--119 million--than Fansite's 2.2 millions streams in July." Kilar would like to believe that the reason is the video distributor's punctiliousness. "We obsess over every little pixel," he said. "I can give you a hundred examples of that." At least as important, though, is Hulu's cutting-edge appoach to distribution. Understanding that people might choose to view TV shows on a whim, Hulu has chosen to place itself in front of as many people as possible instead of having them come to Hulu. To do that, it negotiated distribution deals with top website portals, including Yahoo, MSN, MySpace, and even competitor Fancast. The result is the more people are exposed to Hulu's products than if it rlied (like Fancast) only on its own website. This strategy of distributing video content on the web via many exhibitors has in the past few years become the preferred mode for companies trying to reach large audiences.

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