OK, I have to publicly admit that I’m turning into a Hulu addict. I get to watch my ABC, NBC, and FOX shows whenever I want. No DVR. I also get to watch any original Twilight Zone, Outer Limits, Time Tunnel, Emergency, and Adam-12 episode whenever I want. Ok, its not in HiDef (yet) but it looks great considering the price.
Hulu Nation Is Growing — And Fast
NEW YORK (AdAge.com) — The Hulu nation is growing — and fast.
Fueled by the fall TV season and the addition of ABC shows to its library, traffic to the video site backed by NBC, ABC and Fox spiked nearly 47% in October from the prior month, the biggest single-month percentage gain of the past year.
Hulu served 856 million video streams during the month, up from 583 million in September, according to comScore Video Metrix. Unique visitors were also up nearly 10% to 42.5 million, from 38.7 million in September. Minutes per viewer were also up substantially, to 123 minutes from 92 minutes in September.
ABC, Fall TV help
That’s a bigger increase than Hulu’s last big leap forward in February when an ad during the Super Bowl helped Hulu enjoy a nearly 33% jump in audience during the month.
Two major additions of content contributed to growth: it was the first entire month with ABC shows like “Lost” and “Desperate Housewives” in the Hulu library, a result of Disney taking a stake in the joint venture earlier in the year; it was also the first full month of network TV’s fall season, which started in the last week of September.
Viewing at the TV service — a joint venture owned by Disney, News Corp., NBC Universal and Providence Equity Partners — is starting to follow the patterns of network TV. In June, viewing slipped after network schedules went on summer hiatus and returned in September as the networks began filling the service with new shows.
Driven by network hits
It’s also an indication that increasingly, Hulu is driven by the network hits — and not the long tail of library shows like “A-Team” or “The Lone Ranger.” The emerging rule of thumb: the more popular network TV fare on the service, the more viewing at Hulu.
The top-20 shows over the month included clips from “Saturday Night Live,” “Family Guy,” “The Office,” “Glee” and “V” — not the same list as TVs’ top-20 but an indication that while a Hulu viewer’s taste is different than your average TV viewer, they’re still partial to broadcast over the limited library of cable and other niche programming.
While that’s great for advertisers (and for Hulu’s ad sales) it causes grumbling in the trenches at the networks. While Hulu sells demographics, not individual shows, so as not to compete with direct sales from content partners like NBC, Fox or ABC, advertisers believe they will get those shows regardless, often at a lower rate.
Business at Hulu is booming as advertisers have moved back into the market to pick up inventory not sold in the upfront in May. “They are close to sell out; they’re not going to be able to take orders even if we had money to put on the table.” said John Nitti, senior VP-digital director at Zenith Media, whose clients include Nestle. Mr. Nitti said his firm sees Hulu viewing as replacement for network or catch-up viewing for missed shows.
Close to sell out
In an interview, CEO Jason Kilar confirmed that Hulu is nearing sell-out in the fourth quarter, even with the huge October viewing increase.
“We are getting to a spot where we won’t be able to accommodate additional advertisers until the new year,” he said. “Advertiser demand has exceeded our growth.”
Last year, Hulu had a lot of unsold inventory in part because it was difficult to forecast traffic month-to-month. This year, Mr. Kilar said, the company has gotten better at predicting viewing based on comparisons with Hulu’s first year of operations. “The main thing is we are now able to look back see the seasonality from the prior year,” he said. “In 2008 we had no prior year to look back on.”
That and major marketers have grown comfortable over the past year buying Hulu and all the so-called “full-episode players” at ABC, NBC and CBS because they can repurpose their TV creative and often get exclusivity within the shows.
Boosting ad loads?
Hulu has taken some criticism from TV executives for not boosting ad loads to a comparable level with TV, and now, given Hulu’s near sell-out position, would seem like an ideal time to flirt with more ads. But Mr. Kilar said that’s not in the plan. He’d rather see a return to what he called TV’s “golden age” in the 50s, when ads were far fewer than today. “We believe in a less-is-more approach,” he said. “We are very persnickety about the user experience and how it works for our customers.”
So far, Hulu is a free, ad-supported service, but Mr. Kilar has said in the past he’d consider TV adopting paid models, including TV Everywhere, the scheme the cable industry is testing this year in a bid to preserve their subscription revenue on the web. Mr. Kilar said Hulu could adapt to suit subscription-only content as well, such as HBO and Showtime, but that is still theoretical, at this point.
Despite the raft of deals signed this year, as well as the addition of Disney as an investor, Mr. Kilar said Hulu is far from finished in terms of acquiring free, ad-supported content, including shows from major TV producing countries like Japan and India. Then, there’s the launch of international sites, which Mr. Kilar says will come as soon as Hulu can clear enough content to make them compelling.