Market Assessment and Strategy - Essay Example

? Market assessment and strategy  The exact trajectory of the online video market is difficult to determine due to the dizzying innovation that is happening in the industry. Being still in its nascent stage, the internet video is still in its formative stage compared to the traditional 70 year old broadcast TV where its format and presentation is already established. As of now, industry experts are talking about convergence where information based internet and traditional TV broadcasting will be rolled into one where TV shows can now be broadcasted in the internet and mobile hand held devices and internet video showcasing its own original content shows just like the traditional TV show. Hastings, an industry expert noted that “we are becoming like them in doing some originals and they are becoming more like us in creating an on-demand interface like HBO Go," which allows viewers to watch channels on the Web and on mobile and tabulate devices” (Coyle, 2012). This comment however is not without merit because close analysis in the industry shows that online video is going that way. Already, Netflix, the dominant player in the online video industry premiered its first scripted show Lilyhammer and House of Cards which was originally aired on Fox (Coyle, 2012). Hulu also premiered its own documentary show Battleground in February followed by Up to Speed which is a documentary about the ignored monuments of American cities (Coyle, 2012). Even Yahoo which was originally known as a search engine and email provider launched Electric City an animation series produced and voiced by Tom Hanks. Netflix, the industry leader is already operating under the assumption that TV and internet is converging with TV networks already experimenting on of going online for its shows to be seen in the internet and handheld mobile devices (Coyle, 2012). Inferring to expert’s assessment of the future of internet video, it would seem that the industry is about to boom as YouTube’s global head of content “predicted that by 2020 about 75 percent of channels will be transmitted by the Internet. And video will soon be 90 percent of all traffic” (Coyle, 2012). If these figures will be realized, it would mean big business for Hulu for as long as it will garner a significant chunk of the market. Branding As a brand, Hulu was previously known to be a free internet movie provider whose content were supported solely by advertisement. Its transition from free internet movie provider to paid subscription albeit first was met with resistance (Sandoval, 2009) was however overcome where Hulu is now known as one of the leading provider of internet videos. While Hulu have made decent strides in the internet video industry, its brand is not yet that established compared to its competitor Yahoo who is capitalizing on its existing audience base. Thus, it is highly recommended that Hulu should diversify and create more original content that is patently produced and owned by the company for the brand to be known among consumers. It is also recommended that the company should advertise itself more to increase the presence of the brand. Hulu’s brand presence should also not be limited in North America but extend it abroad including the rising market in Asia if it intends to go global. Positioning The online video market uses the internet as its platform which is global in reach and cost efficient. Having this reach to anywhere in the world for as long as there is an internet connection spells a different economics for industry players because of the sheer volume of its potential market. Unlike in traditional broadcast TV whose immediate reach is limited to one geographical location such as the United States, internet video can reach other countries simultaneously without having its shows or content syndicated to a third party just for the content to be shown outside the territory of its original location. At present, Hulu is limited to US customers and is not able to other regions particularly in emerging market such as Asia. This limitation is an overlook on the part of Hulu because it was not able to capitalize on the scalability of the internet. Its current subscription rate of $10 a month is affordable considering that the variety of videos that the customers can watch via online streaming. This affordability and value for their money should be capitalized when Hulu positions itself in the market both locally and abroad. Evaluation Hulu offers a real value of customer’s money with its $10 a month subscription fee for streaming videos where customers have a variety of selection of TV shows and movies to watch at unlimited times. At present, Hulu has some 30 million monthly users and approximately 1.5 million monthly subscribers (Coyle, 2012) which could still be increased if it will extend its reach outside the territory of the United States. While there may be added cost to satisfy infrastructure improvement and the regulatory requirements of other markets, the potential benefit in terms of market share and revenue is unlimited. Hulu should act fast and become the leading the internet video provider on a global scale to offset the advantage of its competitors such as Yahoo who is enticing its enormous search audience of 180 million to its original internet programming. As a brand, Hulu is not yet that established compared to other video providers online such as YouTube or TV broadcast companies such as Fox which it indirectly competes. This is understandable because the industry which Hulu started is still in its nascent stage. Considering the limitation of the brand’s presence, Hulu should strive to increase the awareness of its brand among its existing and potential consumers. This is important because brand adds value to a product that makes it easier for the company to entice customers as well as allowing it to charge at a premium price. Its 1.5 monthly subscription base is still a pittance compared to the number of internet users which are its potential customers. This figure however can also be taken positively because it means that the market has not yet matured and that there is still a lot of room for the company to expand not to mention the huge potential of markets abroad particularly in rising economies in Asia where the internet video industry is not yet fully explored. References Coyle, Jake (2012). “Netflix, Hulu, YouTube Corner The Traditional TV Market With Their Own Programming”. Retrieved from http://www.huffingtonpost.com/2012/01/27/netflix-hulu-youtube-internet-tv_n_1236218.html Sandoval, Greg (2009). “More signs Hulu subscription service is coming”. Retrieved from http://news.cnet.com/8301-31001_3-10381622-261.html Read More