Category Archives: Hulu

YouTube’s attention deficit disorder

About $59 billion is spent on television advertising in the U.S. each year, so it’s stunning to realize it’s all going into play. TV is changing in two fundamental ways — tablet-type devices now put enjoyable video streaming in your lap, and the next generation of TV sets is being built, finally, with connections that hook you into the Internet. This means that online video sites have a rare opportunity to smack cable companies and snag billions in ad dollars — if they can use the new gadgets or TV screen access to change consumers’ video behavior. About 2% of U.S. cable subscribers “cut the cord” in the past three years, and that may just be the beginning.

Alas, YouTube may have missed the lead in this new advertising landscape. Today is the top video web site in the U.S., with between 111 million or 130 million monthly uniques (comScore and Quantcast differ slightly in their reports). Yet the time spent on YouTube per user is a fraction of competitors’. ComScore reports the typical YouTube viewer spends 2 hours and 14 minutes a month watching its videos — about 15 minutes per day — while Hulu captures each user for 5 hours and Netflix for more than 9 hours and 15 minutes. People like YouTube, but only for video snacks, not for full-course entertainment meals.

Yes, YouTube is still growing — its audience is up 25% in the past 12 months — but it needs more time from its shallow users if it’s going to attract bigger advertising dollars. To help, Google, which owns YouTube, recently announced it will spend $100 million to build richer, longer, professional video content. YouTube also recently launched YouTube Live, a service meant to lure you in longer, although the initial content we found at seems lackluster (tobacco education and cricket games, anyone?).

It won’t be easy. “We are not good at creating content,” Tom Pickett, director of content at YouTube, told Ad Age in March. The only way to get viewers to stay is to build content with a reason.

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

Image: César Augusto Serna Sz

The challenge for Comcast’s web TV = ads

One gigantic fear within the cable industry is the migration of consumers to watching television on the web — via services such as Hulu — will undermine their lucrative subscription model. After all, why pay $150 a month for cable if you get shows for free online? So the obvious defense is to entangle cable subscribers to watch their cable TV on the web as well. The cable industry is hyping this with a so-called TV Everywhere movement.

Comcast is the latest cable provider rolling out a national web TV service, called Fancast XFINITY TV. The service will give free Comcast cable content on the web to any authenticated cable subscriber (at first to only subscribers of both Comcast cable and Internet service, and in about 6 months opening up to any Comcast cable users).

But the ads, dear, are heavy.

There’s a tiny problem — analysts don’t know if users will accept the “full advertising load” of cable programming in an online format., for instance, has compressed ads to 15-second formats and shows only 2 minutes of commercials per 30 minutes of programming vs. the 8 minutes typically shown on a TV set. With online users able to immediately click away at the first sign of boredom, Comcast and other cable giants have two huge hurdles: first, get users to their online TV portals, and second, hope the commercial load of old TV models doesn’t make web users touch that dial. Nielsen has reported that consumers’ “concurrent media use” spikes when spots air on traditional live television; good luck avoiding such switches online when they have a mouse in hand.

In a way, cable companies and broadcasters are to blame for this dilemma. The load of commercials has been increasing ever since Bulova ran the world’s first TV spot, a 10-second ad, in 1941. An average hour of U.S. television now includes only 42 minutes of real programming, down from 51 minutes in the 1960s — meaning that any reruns from that period must be cut by 9 minutes. Television commercials now take up twice the time they once did. If consumers rebel online, perhaps it’s because commercials have gone too far.

Image: Spoon

31,594,000 ways to avoid your content portal

Facebook became the third most popular venue for watching online video in October, signaling the end of content portals. In our age of a million channels where making choices is difficult, the recommendations of our peers are becoming the new TV Guide.

What do we mean? There are three ways that content is distributed: First, producers can push — say, NBC’s old Seinfeld appointment television viewing on Thursday nights in the 1990s. Second, users can search — Google’s rise in the early part of this decade, and more recently the popular YouTube engine that allows you to find funny cat videos. But the third wave is when people you trust do the finding for you.

Here’s a test: Think of all the content your business puts out that you want people to see — your web site, your press releases, videos, ads and marketing communications. Now, add up all the ways you enable others to share your content with their networks of people. Is the sum more than zero?

Homophily at prime time

Human networks amplify the dynamic of “homophily,” the tendency of people you like to enjoy the same things you do. This is why people in cliques tend to wear the same clothes, watch the same movies, discuss the same politics, and now … share the same content. We trust our friends and loved ones. When they share something, we want to watch.

The strategic lesson for marketers is if you want your message to go viral, you have to find ways to entice networks of users to share it with others. For example, Facebook is no Hulu or YouTube yet, but the numbers for video access there are rising. In October 31.5 million unique users watched videos posted inside the social network, vs. 13.4 million on Hulu (the leading site for professional video content) and 105 million in YouTube (top site for user-generated video).

The “sticky” portal strategy of the 1990s is dying a deserved egocentric death. The center will not hold because you are no longer the center. You have to find ways to pass it along.

Über-cocooning: Home alone without the media

Guess it’s hard to cuddle with Broadway tickets.

The down economy is causing consumers to retrench inside their homes, a recessionary behavior that Faith Popcorn has termed über-cocooning. Cost-cutters are turning to new digital alternatives for entertainment, and dissing HBO, cable add-ons, newspaper subscriptions or outside events. Live theaters are filing for bankruptcy, Mel Brooks has bombed on Broadway, and online alternatives such as are surging ahead. Hulu, which only launched in March, has racheted up to 142 million streams per month, just behind the numbers Comcast pulls for video on demand through cable boxes. And cocooning ain’t helping newspapers, either — this week the owner of the Chicago Tribune and LA Times filed for bankruptcy.

Heck, even Playboy subscriptions are down.

Jupiter Research gave DM News a most telling point: At the beginning of 2008 only 24% of online consumers watched feature-length video content on a computer; in 12 months that number has doubled to 50%. It’s so comfy on the couch or in the home office. For anyone who profits by getting consumers to venture outside, it’s time to sharpen your offer.

Photo via i1326.

Hulu: Will web users embrace long-form video?

OK, we’re digging Hulu. In the past few weeks since seeing CEO Jason Kilar at OMMA in New York, we’ve played around with the online TV-video site — and love how the clean interface provides easy access to thousands of movies or TV shows with only 2 minutes of commercials per half hour vs. 8 minutes on regular television.

But we’re still wondering if Hulu, or any online site, can entice web users with long video clips. BusinessWeek reports that Hulu users are up to 4 hours and 16 minutes of video per month –Robert D’Asaro, a media strategist at OMD, noted “now that’s an engaged viewer … (not) somebody bouncing from clip to clip on YouTube.” However, Nielsen notes that U.S. consumers now spend 121 hours and 48 minutes a month watching TV — putting Hulu consumer usage at only 3.4% of that spent with the regular boob tube.

To be fair, users of Hulu also surf the internet, and their cumulative time online adds up. Hulu is getting traction, online video is surging, and overall hours spent per month watching TV is down 4% year-over-year as consumers begin watching more on PC screens or mobile phones. Advertisers are worried about traditional broadcast, and so they’re paying close attention to Hulu’s test that consumers will watch online for a long duration. For now, Hulu is charging three times as much for impressions vs. regular television; the novelty, fewer interruptions, and attuned audience may make that worth the price.

Hulu decreases ads, but viewers still duck them

The online video site Hulu still has a ways to go, but at least it’s making the old ad model more appealing to users.

Hulu CEO Jason Kilar spoke at OMMA this week and noted Hulu gives users a choice of ads they can watch. Unlike regular broadcast or cable TV, which has 8 minutes of commercials for every 22 minutes of content, Hulu intercepts video watchers with only 2 minutes of spots. Users can pick from a selection of ads (say, which Ford car do you want to see) and how the ads are presented (one block up front or brief interruptions in the middle).

Hulu claims 8 million users per month, but still accounts for only 1% of the 11.4 billion videos streamed in August. Hulu is trying to become the portal for all online video, but ABC, CBS, CW and WB still have not signed on. And many consumers still show the tendency to want to steal, um, share video for free with no ads. When Fox’s “Prison Break” launched this fall, more than a million viewers illegally downloaded the first episodes from sites like BitTorrent — even though the show was available for free on Hulu.

Hulu is a valiant effort to create a new web portal, but we suspect most consumers will continue to share video directly with each other. It’s a bit scary for advertisers of all stripes that people, when given an illegal alternative, won’t put up with a few minutes of paid advertising to get to the free content they want.