The Underrated Hulu

It's no secret that I'm a fan of Hulu, the on-demand premium video service brought to you by (most of) the big TV networks. When my DVR burps and misses an episode of South Park, there's Hulu. When my wife and I try to record three concurrent TV shows, there's Hulu. When my kids want to catch up on old "Wallace and Gromit" episodes, there's Hulu.

For TV fans, it's a dream come true. Nearly everything (see Boxee) they've done with the service, they've done right. In fact, I don't even mind the short and infrequent ads that run during the normal commercial slots. I've even rated a few. A paltry 30-second interruption while watching "Flash Forward" is pittance for the benefit of free, on-demand, scripted premium content. Let's take a look at the other benefits:

1. A typical hour-long program (which takes an hour to watch live) is presented in just over 45 minutes.
2. You can pause it -- easy now, DVR fans -- AND you have completely random access to any part of the program. No fast-forwarding or rewinding like a DVR.
3. You can watch it on any Internet-connected computer.
4. If you log in to Hulu, it will remember where you left off watching a program.
5. You can share a show or even a portion of a show using an intuitive editing tool.

I could go on with some more benefits for consumers, but what I've left out is the major benefit to advertisers. YOU CAN'T SKIP THE COMMERCIALS. Let me say that again ... no, just go back and read it again. In an age where everyone seems hell-bent on skipping advertisements (from pop-up blockers to DVRs), the prospect of skipping television commercials is terrible and terrifying for both producers and advertisers. The reason we have "free" television (disregard cable, satellite, and fiber bills for a moment -- there are still free over-the-air signals floating out there) is because of the commercials. If no one watches the commercials, then there will be no more free television. There, I've said it.

So what to do? The DVR floodgates are already open. Forty-four percent of viewers of "The Office" watch it via a recorded version. More than 30% of U.S. viewers have DVRs. There's no unringing this bell. The next logical, albeit unwelcome, step will be to disable fast-forwarding of DVR-recorded programming. Rewind and jump-back will remain, but I believe this is part of the reason that Apple released the iPhone 3.0 software with a 30-second jump-back button but none for jump-ahead, for which Leo Laporte expressed thanks on his ad-supported TWiT podcast.

So how does this relate to Hulu? As I stated earlier, you can't skip the commercials. And you know people are watching them. Who's going to go for a bathroom break during a 15-second State Farm commercial? It stands to reason that ad rates on Hulu seem to be around $10 - $15 higher than their television equivalents, but I'm surprised it's only that much higher. If I had an advertising budget burning a hole in my pocket, I'd be taking a serious look at Hulu for these benefits:

1. Only 1 spot per commercial break, so your ad stands out more.
2. Commercial breaks are only 15-30 seconds long, so people are paying more attention.
3. There's an always-present banner ad that complements the video ad.
4. Your ad is being seen during the day/time that you intended for it to be seen and not when it was recorded and then later played. Who cares about an movie ad on a Monday or a college football promo on a Sunday?
5. You can get feedback (like/dislike) on your ad.
6. You can have one creative be shown to women and another to men for the same show.
7. In case you missed it earlier, you can't skip past the commercials.

I see Hulu as a win all around, whether you're a view, producer, or advertiser. If you're the latter, give it a whirl.

DISCLOSURE OF MATERIAL CONNECTION: 0