Last week, we discussed how streaming has dramatically altered the television landscape for consumers and companies alike. We discussed how even though Netflix, which is arguably the most famous video streaming service, doesn’t have advertisements, Hulu (Netflix’s biggest competitor) does.
This week, we want to dive deeper. In 2018, Hulu claimed that it gained $1.5 billion in ad revenue and boasted 25 million subscribers by the end of the year. With the incredible growth that Hulu has witnessed in the past few years, we can’t help but wonder, how are they doing this and how can we, as marketers, benefit from this growth?
The first thing to point out about Hulu is that it’s not like other video streaming services. Traditional subscription video-on-demand services, also known as SVOD players, offer a broad library of media for instant streaming and usually without ads. Hulu, on the other hand, does both SVOD and live television. It livestreams certain shows or events such as The Bachelorette and live sports, and in doing so, it allows viewers to have the best of both worlds. In addition, in recent years Hulu has been really pushing its exclusive and original content, with its Handmaid’s Tale series garnering critical acclaim and awards, allowing it to raise switching costs and attract even more subscribers.
So how do marketers leverage this? For now, it seems like there won’t be too much of a difference in practice. Hulu plays its ads intermittently during streamed episodes much like traditional television, and its live TV should work similarly to the current system of ads. As far as how marketers should adapt, it will be important in the next few years to pay close attention to whether Hulu will change their current advertisement practices. While the service boasts incredible subscriber counts and ad revenue statistics, the company (founded in 2007) has still yet to make a profit.
This may change with Disney gaining 60% control over the company, and with Disney+ launching in November of this year, a bundle with Hulu and Disney+ may change or alter the current situation.
Regardless, the company’s own profitability, Hulu’s ability to control which ads go to which viewers holds an enormous amount of promise for marketers. Rather than have ads broadcasted to all audiences at specific times, Hulu allows advertisers to target specific audiences depending on which shows they’re watching, allowing marketers to create more personalized ads targeting younger audiences. As a company that makes its own Hulu originals, Hulu also provides opportunities for advertisers to sponsor or integrate their products into the shows.
Times are definitely changing, but that doesn’t mean advertisers are getting left behind. The opportunities that streaming services and newer media players hold for marketers are endless, and based on the data from Hulu, it seems like marketers will be able to target specific audiences with even more effective advertising.