Net Streaming Service of Hulu - Essay Example

?One of the most elusive aspects of business development is seeking to leverage an effective growth strategy that can propel a given firm or company to an astronomic level of success and profitability. Although this is in fact elusive for many firms, a number of tech startups since the Internet revolution have effectively navigated this difficult environment and proven themselves to be able to survive in the cutthroat world of competition that exists for them. Evidence of such companies can of course be found with regards to firms such as YouTube, Apple’s iTunes, Microsoft’s Xbox, Netflix, and a variety of others. However, for purposes of this brief analysis, the author will focus upon the net streaming service of Hulu. Ultimately, the Hulu service differs from the others that have been discussed to a greater degree than might initially be realized. Accordingly, the following analysis will be concentric upon discussing and analyzing an article printed in the Harvard business review, entitled “Hulu: An Evil Plot to Destroy the World”. By engaging with this particular analysis, it is the hope of this author that the reader will come away with a more profound and effective understanding of the way in which Hulu has grown and leverage market demands as a means of becoming a dynamic player within the current media content available online. However, before delving directly into such analysis, it is profoundly important for the reader to understand that the market Hulu integrated, back in 2009, was already saturated, and not amenable to further entrants into the market. The article begins by laying out many of the obstructions that existed for Hulu in the early years of its conception and initial offering. Begun in 2009, Hulu was already behind the curve and had the established likes of iTunes, Netflix, Xbox, and YouTube to contend with. Yet, rather than despairing and it merely assuming that the market was saturated and could not accept another entrant at the time, the developers of Hulu instead sought to focus upon the way in which media content was delivered to the end consumer. As such, pace that, which the author notes had previously been considered as something of an “clown company” has become one of the major networks for distributing media content via the Internet. The idea that allowed pace that to differentiate itself from the other established entities within the market was the fact that it did not require a recurring subscription fee to view the media content that it provided. The reader might be quick to point out that this was not a new concept due to the fact that services such as YouTube and others have long offered subscription free media content to the consumer. However, if one looks at the ultimate business model behind YouTube, and many of the other media streaming sites, it can readily be understood that the majority of this content is concentric upon user generated media. What is meant by this is the fact that sites such as YouTube derive their revenue based upon advertisements, rather than subscription fees, by placing the banners and role as on the media content that their site provides. Although this was precisely the approach that pace that sought to integrate, it did so without having a focus upon user uploaded media. Instead, the developers of Hulu sought to negotiate contracts and distribution rights with several of the main media companies within the United States. Even a cursory review of the media market within the United States delineates the fact that only five major industries control almost 95% of television media. As such, seeking to go directly to the source and acquired distribution rights from these entities was one of the first steps in seeking to prompt Hulu into a higher level of profitability and exposure to an increasingly sophisticated and technologically advanced demographic. Moreover, rather than merely targeting the end product of television media, the television shows and movies themselves, the developers of peace that realized that television media and Internet were beginning to coalesce at a remarkable rate. As such, seeking to integrate media providers such as Comcast or Time Warner was a further approaches they made so that when such a coalition between media content and media provider began to take place, pace that would be perfectly situated to capitalize upon this. Whereas each of the business decisions which a previously been discussed were powerful in helping Hulu to become the giant of media content that it is today, perhaps the most important choice the developers of Hulu made was with regards to targeting a specific demographic and making any and all decisions that the firm thought integrate with in the future based upon how the demographic might respond. From the analysis that is been conducted, the author noted that Hulu found approximately 50% of their viewership were male. Moreover, over 33% of their viewership was between the ages of 18 and 34. By utilizing these statistics to hone the media offerings and advertising that was promoted within the site, Hulu virtually guaranteed and astronomically higher level of profitability for their services that would be experienced has been merely sought to integrate with a broader and less specific demographic. Interestingly, even as Hulu grew, the developers did not take their eye off the prize. What is meant by this is that they continued to view the message boards and integrate with the needs and concerns of the consumers; as they were expressed in text of the discussions that were taking place concerning the media streaming site. Although each of the approaches that of enlisted previously merely indicate the level of good business sense, it can and should be understood that Hulu was also applying and “catch them while you can approach. Once again, this approach was due to the fact that TV was rapidly losing viewers to the online format. Realizing this trend could not go unabated without the media giants within the industry moving to capitalize upon it, Hulu sought to provide the solution that would allow for a high level of profitability and an arguably genius business plan. Whereas TV had previously been viewed as an ineffective and ultimately shotgun approach to advertising to a broad demographic, Hulu was able to hone this demographic and specify the type of ads that would be shown to the most likely viewer. In seeking to even further streamline this approach, Hulu integrated with what became known as an ad selection. Although Hulu was not the first to invent the as selector, it is arguably the web service that has promoted the ad selection framework to the height of its efficiency and profitability. In short, there is no single determinant that is allowed Hulu to experience the height of success that it is thus far engendered. Rather, a series of choices, lightning quick reflexes, focus upon the consumer, and attention to demographic and changes to the market have allowed Hulu to continue to integrate with viewers whereas traditional platform such as television continues to lose profitability. An interesting component of this particular industry that was not discussed within the article, and is not likely to be analyzed within any future discussions, is whether or not the media streaming of television shows will continue to be profitable in such a time that television itself is no longer profitable. Within the current dynamic, the revenues from advertising upon traditional television are ultimately what provide the demand for media content within the realm of the Internet. Naturally, it is not the understanding of this author that sites such as Hulu will simply disappear; rather, a new dynamic will be more through which the Internet is the ultimate medium through which such content is made available. Read More