February 25, 2013 by

Just to set the stage in the simplest of terms: Hulu is streaming TV (and a movie service with original content, but put this part aside for a minute). News Corp. and NBCUniversal started Hulu as internet video in 2007 as a single website offering the previous night’s episode of The Simpsons. From those humble yet visionary beginnings, the service has grown dramatically. This year, it’s on pace to exceed $600 million in revenue. Most of Hulu’s 25 million unique visitors access Hulu for free, but more than 2 million willingly pay $7.99 a month to access Hulu’s full library of programs from all six major broadcast networks and more than 400 content providers. That’s a reported 5,482 TV series and film titles, 181,020 videos, and more.

Put in even simpler terms, Hulu is TV—just watched differently by time-crunched, multi-screen viewers. And this is where the traditional businessperson who wants to reach people has to put her head. Not-so-traditional marketers are adding Hulu to media plans to supplement the reach of TV gained the traditional way via network, cable, and spot schedules.

Hulu serves up ads to both free access and paying viewers. Before the requested program streams, ads are served up for view. Users show tolerance for ads and are even asked if the ads are “relevant” to them. If they are, they may get an ad of similar relevance served up that they can sit through or skip. According to ComSource.com July 2012 online video rankings, Hulu leads the way serving 46.4 ads per viewer per month. Hulu says 96 percent of those ads are watched in full. Average age of viewer: 38, skewing younger and about even male/female.

The young digital natives likely made it what it is today, but the user demos are expanding in age and showing a solid $85,000 average household income with 33 percent over $100,000. That’s why Hulu’s roster of more than 1,000 advertisers is growing, too, including national brands Geico and Toyota.

Don’t misunderstand: Network and cable TV are nowhere near dead. But viewership is down 12.5 percent since Hulu’s launch and 3.6 million U.S. residents have abandoned pay-TV for internet video in the last five years. Ask the people under 30 in your office if they even own a TV…

Hulu is one way to reach the multi-screen, time-shifted viewer. And at just four minutes of ads served up pre-program streaming vs. average eight minutes of ads on commercial breaks on network TV, Hulu brags that general, brand, and message recall plus likability are all higher among their viewers. Not bad attributes once you can get your head around “Hulu is TV.”

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