Hulu - an Evil Plot to Destroy the World

Hulu - An Evil Plot to Destroy the World

Question 1:

List the various groups of customers that Hulu’s business encompasses. Would it be possible for Hulu’s decisions to satisfy all parties simultaneously?

Response:

The Hulu platform business model encompasses the following groups of customers.

* Content Owners

* Content Distributors

* Users

* Advertisers

Content Owners:

“Hulu is about the Content Owners taking matters into their own hands - about participating in the value created through distribution of their content” - Andy Forssell

* FACTS:

* July 2009 - Hulu has 170+ content partners including ABC, NBC, FOX and various independent Content Owners

* Many legal hurdles involved in content acquisition - Who owns what!?

* Hulu content contracts were NOT exclusive - Owners were free to make deals with other platforms

* COMMERCE:

* Equity Partners - Receive 70% of Hulu generated Ad Revenue for owned content

* Non-Equity Partners - Receive varying percentages of Ad Revenue for content

* CHALLENGES:

* Content Owners hesitant to distribute content through Hulu for fear of eroding their TV Ratings and DVD Sales

* Content Owners wanting to make content exclusive to their own distribution platform (own website)

* Cable Operators taking a “hard line” with Cable Networks by imposing restrictions and causing networks to balance a desire for online video distribution with existing business relationships

Content Distributors:

“The core idea was to bring the content to the audience, rather than forcing the audience to come to one site to watch shows” - Hulu Case

* FACTS:

* July 2009 - Hulu had deals with 30+ affiliated websites

* Distributors enable Content Owners to connect with Users across platform

* Distribution Network helps Content Owners discover new viewers and monetize their content - emphasizes Hulu as connection platform...