One year up and Hulu is still strong

Screenshot from movie and TV show downloading site Hulu.com

TEXT OF STORY

Bill Radke: Happy Birthday, Hulu. Today's the one-year anniversary of the Web site that lets users watch full-length TV shows and movies for free in exchange for watching a few short ads. Since Hulu started, some big-name competitors have moved in. And TV on the Web has become a billion-dollar game, as Marketplace's Jeremy Hobson tells us.


Jeremy Hobson: Many people heard of Hulu for the first time during the superbowl. Actor Alec Baldwin was the pitchman. TV may rot your brain, he said, but Hulu is just trying to soften it.

Alec Baldwin: Mushy mush. And the best part is there's nothing you can do to stop it. I mean, what are you going to do, turn off your TV and your computer?

Turns out most Hulu users are still using both. The site streams 1,100 different shows to a growing audience of 25 million users a month. That's attracting a lot of competitors, like Joost and CBS Interactive's Web site TV.com. That site was recently redesigned and now functions a lot more like Hulu, says CBS's Anthony Soohoo.

Anthony Soohoo: We kicked off the redesign at the end of December, and we've seen steady, quick growth in the triple digits ever since.

All these sites look pretty similar, so they're seeking ways to distinguish themselves. TV.com led with a social networking aspect. But starting today, Hulu will have one, too.

Hulu's senior vice president Eric Feng says, surprise, surprise, it's all about better advertising.

Eric Feng: Because of this technology, because of this engagement, you now can gather a lot of interesting information about the user and serve better targetted ads.

Bobby Tulsiani follows online media for Forrester Research. He says Hulu may be growing, but it's still the scrawniest kid on the block.

Bobby Tulsiani: It's getting to be a billion dollar market, but when you put that relative to TV being a $60 [billion]-$80 billion market, it still dwarfs it.

Tulsiani says to put on weight, Hulu needs to get people hooked wherever they are.

Tulsiani: They should be able to do that on their mobile phone, they should be able to do that on their TV, they should be able to do that from their Xbox.

Right now, they can't. Hulu's Eric Feng says those advances are in the works. But he says the company's currently focused on keeping its status as one of the top video sites in the U.S., and fighting off its number one competitor, piracy.

One more thing: if you use Hulu, you might think it's great to have just a few short ads on a 30-minute show. Bobby Tulsiani says don't get used to it.

Tulsiani: The quickest way to money is multiply the number of commercials usually. And it's always started this way. If you looked at the cable industry, the whole promise of cable in the 70's and 80's was it was TV without commercials.

And we all know what happened with that.

In New York, I'm Jeremy Hobson for Marketplace.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

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