< Hulu Hoopla

Transcript

Friday, October 03, 2008

BOB GARFIELD:
When word got out a year ago about a new streaming video website from NBC Universal and News Corp, called Hulu, the tech blog community erupted in ridicule. Oh yeah, mainstream media is going to take on YouTube and pirated video sites - that should be amusing.

Well, months after Hulu’s official launch and over 100 million streams later, the skeptics are eating their words. PC World named Hulu the number one product of 2008. Number two was the iPhone. And now lots of those snarky bloggers are watching hit shows on Hulu, along with long forgotten series, decades old episodes of Meet the Press, and even shows made just for the Web.

Jason Kilar is the CEO of Hulu and he says there’s no shortage of video sites offering TV shows. It’s just that most of them aren't legal.
JASON KILAR:
You can certainly go after that and legally try and address that problem, but it’s a very challenging and daunting task. I prefer to actually go out and compete with those types of services because they're very good services.
BOB GARFIELD:
One of the interesting things about Hulu is that even though Fox and NBC are its principal backers, I can find other content on there from Viacom, its Comedy Central, and CBS and so forth. Now, that was clearly a strategic decision not to exclude the competition. How did you come to that decision?
JASON KILAR:
We're a start up who’s focused on the user, and the user, quite frankly, wants it all. They want all the content. That’s why, yes, we started with two investors that happened to be content partners, but now we're over 100 content partners, folks like Warner Brothers and Viacom and, you know, sports leagues. It was a very conscious decision to make sure that this was not about just two content partners but, rather, everyone.
BOB GARFIELD:
If people are watching NBC and Fox programs and programming actually from other sources on Hulu, then they are not watching their local TV stations, upon which these vast media organizations depend for, you know, the biggest part of their distribution. You’re killing my local TV station, aren't you?
JASON KILAR:
You know, people are spending more time online, and that’s with or without Hulu. And increasingly over the last five years, a portion of that time is downloading television content illegally.

The question is, as an industry, should content owners try and compete with piracy and try and be relevant in an environment that people are spending more and more time, which is the Internet, or should they sit on the sidelines?
BOB GARFIELD:
As to my original question about local affiliates, would you go to the National Association of Broadcasters without - a personal security detail at this point?
JASON KILAR:
No, [LAUGHING] not at all. And, you know, what’s interesting is that we make the entire Hulu content library available to every one of their websites. Right now if you take a look at the Hulu library, it’s been embedded on over 41,000 websites.

So if I were a local station owner, you know, clearly I'd be thinking about, well, how can I, you know, make sure that my brand is relevant in the online space? And we'd love to help, and we have helped.
BOB GARFIELD:
Tell me about how my experience with advertising is different on Hulu than it would be, say, with broadcast.
JASON KILAR:
We wanted to do a couple of things with the user experience. One is we wanted to have a reasonable advertising load. The amount of ads that you see on Hulu are about a quarter of what you would see in the living room.

But there’s also good news for advertisers, because you can do a lot more targeting on a service like Hulu than you can in other channels. And I'll give you just one example.

If you’re a car company and you have a number of cars that you'd like to market, traditionally you make estimates as to what car you want to put against what show, whereas on Hulu you can let the user decide.

So at a commercial break, the user can decide whether they want to watch a sports car ad, a minivan ad or a hybrid. And when the user makes the decision, it’s a much more efficient match, and you have a much more engaged viewer.
BOB GARFIELD:
And, by the way, in the not too distant future, my local pizzeria will be able to take my IP address and advertise to me on a program it never would have had access to under traditional media circumstances.
JASON KILAR:
That’s exactly right. People all across the U.S., for example, have access to content now 24/7, but advertisers should also have access to that service 24/7. And so, the notion of a pizza delivery company in Santa Monica, California being able to get access at just the dinner hour on a Friday night for their specific one mile radius is something that we absolutely believe is in the future for Hulu.
BOB GARFIELD:
The question is, though, whether you can enjoy enough volume and a large enough premium for your, you know, enhanced targeting before the networks collapse due to their own shrinking audiences. I mean, are you - can you get there in time?
JASON KILAR:
There’s a natural tendency that people have, particularly, you know, bloggers and journalists, to basically say the world has changed, and I'm going to be dramatic when, in reality, any consumer behavior change like this takes a long time.

You know, e commerce is a great example. E commerce has been written about quite a bit in the press. And if you were to look at the sort of the amount of headlines and coverage about its impact on the world, you would think that 50 percent of retail is actually occurring online when, in fact, the reality is that it’s far less than 10 percent. These, you know, transitions and migrations take much, much longer than anybody thinks.

That said, more and more minutes are being spent online, and Hulu is a service that’s absolutely seeking to be relevant in that space.
BOB GARFIELD:
Well Jason, thank you very much.
JASON KILAR
Of course, Bob.
[MUSIC UP AND UNDER]
BOB GARFIELD:
Jason Kilar is the CEO of Hulu.