1. Hulu Launches Live TV, T-Commerce, Addressable Advertising
This year’s award for “Largest Number of Significant Announcements In A Single Upfront Event” may well go to Hulu. And we mean that in a good way.
Hulu made several announcements of note, the major one being the release of the beta version of their new pay-TV service.
Our friend Peter Naylor, Hulu’s head of ad sales, has been telling us for a while now that the interface is impressive, and he was not exaggerating—it’s beautiful, intuitive and actually asks you for your favorite shows/channels up front, so it can get a head start on recommendations.
Playing with it for an hour or so reminds us of just how awful most MVPD interfaces are. Which reinforces a point we’ve been making for a while: a large part of the public’s dissatisfaction with pay-TV stems from the fact that people are sick of paying Nordstrom prices for Kmart service: if you’re paying over $100/month for a bargain-basement interface … well, who wouldn’t feel ripped off.
In addition to being pretty, Hulu’s offering is also a good deal, especially if you are already a Hulu subscriber. (And live in a city where the broadcast networks have O&Os. And don’t care about Viacom or Discovery.)
For $83/month, you can get the full Hulu TV service (which in NYC includes the local sports channel YES), plus a 200 hour cloud DVR that lets you fast-forward through commercials, plus the ability to watch on an unlimited number of screens at home, plus the pre-existing ad-free Hulu SVOD service, plus Showtime. If you’re already paying for ad-free Hulu, that’s only an additional $71/month. Add on $15/month for HBO Now, and your total is $86 for what you were likely paying Comcast or Verizon upwards of $100/month for.
You also get a quantum TV experience which is something you can’t get from MVPD TV right now—the ability to start watching on one device and quickly pick up on another right where you left off. (Some MVPDs are offering this via their TVE apps, but it’s still far from seamless or intuitive.)
You get a personalized interface—each member of the family has their own account, and so, for the first time, your pay TV service is personalized for your own likes and dislikes. This is a nice plus for families and for advertisers as well, as it allows for more targeted ads.
And finally, you get an attractive, modern looking interface that works off your device remote rather than off its own separate remote, you know, the ones the MVPDs give you, the ones with 75 buttons, only 8 of which actually seem to have any sort of actual functionality.
The only quibble we have with Hulu TV is that it’s launching on two of the least popular connected TV devices: Apple TV and Xbox One. An app for Roku, which controls just about half the connected TV market, is allegedly in the works, as is a browser app for Windows and Mac users. But for now it’s just phones, tablets, Chromecast, Xbox One and Apple TV.
Why It Matters
While we’re still skeptical of the long-term success of many of the new virtual pay-TV services, Hulu is of interest because it’s owned by four of the major network groups—it’s the first time in the post-cable era that the people who own the programming also own the means of distribution. Hulu gives networks a way to gather data on their customers, including credit card numbers and email addresses. That’s significant as it gives them a way to understand their audiences better—they’re no longer just a series of “Women 18-34” from Nielsen—and to put more targeted ad programs like cross-platform in place.
Hulu TV also highlights just how important the interface is and how far behind the TV industry has been in modernizing theirs. Pretty and elegant doesn’t always matter to consumers—witness the defeat of TiVo by MVPD DVRs—but when you add in high prices, design starts to matter. (Witness Starbucks.)
What You Need To Do About It
If you’re a pay-TV subscriber and you’re not wedded to Viacom and Discover, then definitely check out the new service—it’s free the first week, though we’d suggest you wait if you don’t have an Apple TV or Xbox One.
If you’re an advertiser, we’d suggest looking into some of Hulu’s new ad units, particularly the t-commerce units they’re doing in conjunction with Brightline. We’re skeptical of t-commerce—people aren’t going to stop watching to make a purchase—but these units, which include the ability to buy a movie ticket from inside a trailer—may be the exception to the rule because of the product categories they target.
We’d also suggest looking into Hulu’s version of addressable TV advertising. Right now, it sounds a lot like what AT&T/DirecTV and Dish are doing—inserting ads via Dynamic Ad Insertion (DAI) into the two-to-three minutes per hour the MVPDs (or virtual MVPDs, as the case may be) are allotted during prime time. But given that the networks own Hulu, if addressable is a success, it’s not hard to see the networks that own Hulu expanding its reach.
2. Celebrities Do Digital Video
Zosia Mamet and Rashida Jones are creating videos for Refinery 29. Ellen DeGeneres is working on something for YouTube. America Ferrara is producing documentaries for Hearst.
It’s a smart move for everyone involved—celebrities get to have a bit more freedom (though a bit less budget) for their pet projects, and digital video publishers get the benefit of a big name.
And it all but guarantees headlines during the Newfronts.
Why It Matters
The line between digital video and TV is blurring rapidly and will continue to blur. There’s no reason why an MVPD pay-TV platform that’s centered around a recommendation-based program guide shouldn’t have short form content as part of its offering—if a user likes short-form or only had 15 minutes to watch, why not collect the ad revenue? Having celebrities on board only makes it likelier that people will tune in.
What You Need To Do About It
If you’re an MVPD, you need to get with the program and start buying up rights to premium short form video.
If you’re a short form publisher, take that call from ICM or CAA—celebrities are good for your brand. (Most of them, anyway.)
And if you’re an advertiser, we’ve got one word: sponsorships.