Hulu's Jason Kilar 'Thinks Different' about television

Hulu Chief Executive Jason Kilar chose the advertising agency's conference in Los Angeles to do his own riff on Apple Inc.'s "Think Different" campaign.

Instead of saluting "The Crazy Ones" from the memorable TBWA/Chiat/Day ad campaign from 1997 that heralded the rebirth of Apple -- and featured some seminal figures of the 20th century, including Dr. Martin Luther King, Mohandas Gandhi and Albert Einstein -- Kilar offered his own pantheon of innovators.

Kilar saluted those who strove to do better -- including Walt Disney, who conceived of the idea for Disneyland while sitting on a park bench in Griffith Park, watching his daughters ride a merry-go-round; James Dyson, who invented the bagless vacuum cleaner (and brought a sense of industrial design to the bland household appliance), and Steve Jobs, whose iPhone relegated the rotary dial phones to museum pieces.

"I can think of no bigger inspirations for looking at the world around you and looking for a better way," said Kilar, speaking Wednesday at the American Assn. of Advertising Agencies conference at the Beverly Hilton hotel.

Hulu, said Kilar, strives to bring the same relentless innovation to television. "If we're really on our game people will look back on it and will say, "Wow, I can't believe TV was like that in 2007."

The online television service, which is jointly owned by media giants News Corp., Walt Disney Co. and Comcast Corp.'s NBCUniversal, as well as Providence Equity Partners, brought in $420 million in revenue last year. The site, which features television shows from the current season, attracted some 37.7 million viewers last month.

Kilar articulated his oft-repeated vision for the future of television, saying it will become more personalized (the way Internet radio service Pandora delivers music tailored to a listener's taste) and social.

"TV is one of the most social mediums.... The things people talk about most are the weather and television," Kilar said. "With digital, we should be able to encourage social to the core. It's going to be a big, big deal."

Kilar also highlighted some of Hulu's attempts to re-imagine advertising, including allowing the viewer to choose which ad they'd like to watch, or to skip commercials they don't find relevant. Such efforts increase the viewer's ability to remember the promotions they've watched, Kilar said. "The recall goes through the roof because they're mentally engaged with the ad."

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Video: Steve Jobs narrates this unaired version of Apple Inc.'s 1997 "Think Different" ad campaign.

CW switches to next-day streams for episodes of prime-time series

After studying the viewing behavior of its young audience, the CW television network has switched strategies and is no longer delaying the online release of such popular shows as "Gossip Girl" and "The Vampire Diaries."

CW -- a joint venture of CBS Corp. and Warner Bros. -- said Thursday that it would begin making episodes of its prime-time series available several hours after their initial television broadcast. The move is significant because it illustrates how television companies are moving quickly to adapt to rapid changes in technology in an effort to protect important revenue streams.

"Consumers have been telling us that they want the ability to watch their shows whenever and where ever they are," said Rick Haskins, CW executive vice president of marketing and digital programs. "If we don't listen to them, we will be missing an opportunity."

In recent years the CW has made dramatic changes in its online strategy as the network has figured out how to better monetize digital views of its programs.

Early on, the network hesitated to put its shows on the Web at all. But since September 2010 the CW has been delaying the online release of its episodes until three days after airing.

The three-day blackout was designed to boost the TV ratings, and thus protect the important TV advertising revenue. Advertisers pay premiums to reach viewers who watch shows on TV or within three days of their original airing, if the program has been digitally recorded.

CW executives were betting that viewers would be so eager to watch fresh episodes of their most popular shows, including "The Vampire Diaries," "One Tree Hill," and "90210," that they would watch them on TV rather than wait to see them on their laptops.

Viewers were eager to see the latest episode, all right. Research by the Warner Bros. anti-piracy group discovered that nearly a third of online viewers of CW's most popular shows were so motivated that they watched them on a pirate website.

"And 50% of that consumption was done during the first three days after the television run," Haskins said. "That's a lot of money out of our pockets."

By releasing its shows just a few hours after their TV broadcast (at 3 a.m. Pacific time), the CW hopes to reach viewers who otherwise would have pirated them. New technologies also allow the CW to measure the number of online viewers and determine whether they watch the commercials, providing another source of reliable audience data to share with advertisers.

The CW also has been at the forefront of advocating heavier "commercial loads," so the online streams contain as many ads as would be seen in a TV broadcast.

That is a departure from conventional wisdom among most online video distributors. Many believed that online viewers would lack the patience to sit through too many commercials. Sites such as Hulu offer episodes with about half the number of ads that would run on TV.

"We have found that viewers were indeed willing to watch a full commercial load," Haskins said.

CW also announced Thursday that it was introducing its first mobile application for iPad, iPhone and Android platforms. The app enables full-episode streaming of the network's prime-time series and provides a feature for fans to alert their friends on Facebook and Twitter that they are watching a particular episode.

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Photo: Joseph Morgan in a scene from the CW hit "The Vampire Diaries." Credit:  Quantrell Colbert /  CW

Hulu strikes distribution deal with Fremantle

In deal that validates the quality of some original programming for the Web, Internet video service Hulu reached an international distribution agreement with FremantleMedia Enterprises.

Fremantle -- whose television production unit is best known for "American Idol,"  "America's Got Talent" and "The X Factor" -- signed a first-look deal for rights to distribute Hulu's original shows to global markets.

The first program Fremantle will attempt to sell is documentary filmmaker Morgan Spurlock's acclaimed series, "A Day in the Life." The second season premieres Monday on Hulu and its subscription service, Hulu Plus.

"For us, this isn't about one particular project, it's about getting into business with Hulu around their new content initiative," said Jeff Tahler, Fremantle's senior vice president of acquisitions and development.  "Looking at what they've done ... (and) their original programming efforts, it's similar to any other network or production company."

Hulu stands to benefit from Fremantle's broad reach and access to traditional distributors for television programming.  For the moment, the online service -- which is jointly owned by media giants News Corp. Walt Disney Co. and Comcast Corp.'s NBCUniversal -- is only available in the United States and Japan.

"That'll expand over time," said Andy Forssell, Hulu's senior vice president of content. "No matter how aggressive we are, there will be plenty of opportunities to get this content out that we'd be crazy not to look at."

Broader distribution also would provide additional revenue to help underwrite the cost of creating new shows. Hulu and competing subscription services like Netflix Inc. have been launching original programs as a way to differentiate their services.

Netflix's first scripted series, "Lilyhammer," premiered last month.

"The quality [of the originals] has got to be really high because it's sitting next to the best shows on TV last night," Forssell said. "It's a challenge. We're going to be very selective."

Hulu also has secured the rights to exclusively distribute more than 30 documentary films, including Amir Bar-Lev's "Re:Generation Music Project" and Spurlock's upcoming "Comic-Con Episode Four: A Fan's Hope," a behind-the-scenes look at the thousands of fans who gather each year in San Diego to attend the world's largest comic book convention.

"Documentaries have always done well on our service," Forssell said. "It's a passionate audience. Many of them tend to be tech-forward leaning."

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Photo: Director Morgan Spurlock in "POM Wonderful Presents: The Greatest Movie Ever Sold." Credit:  Daniel Marracino / Sony Pictures Classics.

Univision telenovelas with a twist: English subtitles

Univision Communications is going bilingual. Well, sort of.

Beginning next week, the Spanish-language media giant will begin offering closed captioned English-language subtitles for its prime-time telenovelas, or soap operas. The move, announced Tuesday at the National Assn. of Television Program Executives convention in Miami, underscores the belief by  TV executives that the enormously popular Latino series, which run five nights a week and can last for several months, have commercial appeal beyond their loyal Spanish-speaking fan base.

Already, the programs have catapulted Univision to the rank of the nation's fifth most popular network. Advertisers have taken notice, intrigued by the passion of the audience and the rapid growth of the U.S. Latino population. 

“The continued success of the telenovela genre speaks to its broad appeal that crosses culture and language, which is why, as part of our commitment to connect audiences to our culture, we are delivering our novela block with closed captioning in English,” Cesar Conde, president of Univision Networks, said in prepared remarks.

Most of the Univision novelas are produced by Mexican powerhouse Grupo Televisa, which has an equity stake in Univision. Univision is also planning to launch a new cable TV channel in the U.S. dedicated to the soaps.

Earlier this week, another U.S. media giant -- News Corp. -- said that it was partnering with Colombian programmer RCN to form a new Spanish-language broadcast network in the U.S. called MundoFox. It is expected to launch in the fall. Others have joined the stampede to attract the Latino audience. Last month, online video service Hulu began providing Spanish-language programming.

Univision is currently airing “Una Familia Con Suerte” ("A Fortunate Family") and “La Que No Podia Amar” ("The One That Couldn’t Love"). On Monday, the New York-based Univision will roll out its highly anticipated telenovela, "El Talismán,” produced by Univision Studios and the Venezuelan company Venevision.

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Photo: Actors Rafael Novoa and Blanca Soto in "El Talismán." Credit: Univision Communications and Venevision Studios

Hulu introduces "Battleground," its first original scripted show

Online video service Hulu's ambition to become a destination for high-quality, original, scripted shows begins with -- and not on -- a "Battleground."

Hulu executives and show producers on Sunday unveiled Hulu's small programming slate, which consists of three productions, including the politically themed "Battleground," during the Television Critics Assn. press tour in Pasadena.

Networks have long used the nearly two-week gathering of journalists to promote their upcoming series. It was Hulu's first appearance at the press tour, and was particularly noteworthy because it marked the first time an online distribution platform participated in the event traditionally reserved for such TV industry heavyweights as ABC, CBS, NBC, HBO, Showtime and Fox.

"We've long asked the question, how come the creativity and vibrancy that exists in the indie film world doesn't exist in TV?" Andy Forssell, Hulu's senior vice president of content, said in an interview. He said Hulu executives concluded that the reason was television's structural barriers, including the mandate that shows immediately produce sizable ratings.

"For us, we don't need a show to take off in the first, second or third episode," Forssell said. 

Hulu's first effort in scripted TV programming, "Battleground," debuts Feb. 14.  It is directed by actor J.D. Walsh ("Studio 60 on the Sunset Strip") and produced by Hagai Shaham ("The Details") and Marc Webb ("The Amazing Spider-Man" and "(500) Days of Summer").

The 13-episode series is timely, coming in the midst of the Republican primary season. The show, which employs the "faux documentary style" of storytelling, follows a rowdy group of campaign workers who labor to advance the chances of a third-place candidate in the battleground state of Wisconsin.

Fox television originally bought the script but passed on making the show.

"We saw a spark there," Forssell said.  "We think the show has the potential to be something that people say: 'This is one of the best things I've seen in the last couple of weeks.' "

Hulu also plans a second season for Morgan Spurlock's "A Day in the Life," a series that debuted last year.  In its first season, the show followed such luminaries as music producer and Black Eyed Peas member will.i.am and British entrepreneur Sir Richard Branson. 

In the second season of "A Day in the Life," Spurlock ("Super Size Me" and "The Greatest Movie Ever Sold") and producing partner Jeremy Chilnick plan to capture the daily routines of actor Joel McHale ("Community") and UFC fighter Jason "Mayhem" Miller, among others.

The third original show is "Up to Speed," which comes from filmmaker Richard Linklater ("Dazed and Confused" and "School of Rock.") Linklater has committed to directing six episodes of the show, which Hulu said is designed to discover "historic nooks and crannies of notable destinations."

Although Hulu is developing more original productions, it has no plans to compete with the broadcast networks, Forssell said. (After all, Hulu is owned by broadcast-network owners Walt Disney Co., NBCUniversal and News Corp.).

"The core of the Hulu business is working with the big studios and the big networks and that hasn't changed," Forssell said.

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Photo: Cast of "Battleground," Hulu's first original scripted show. / Credit:  Hulu

 

Hulu surpasses 1.5 million subscribers

Hulu finished 2011 with 1.5 million customers enrolled in its 14-month-old subscription offering, Hulu Plus.

The Santa Monica-based Internet company also notched $420 million in revenue for the year, an increase of 60% over 2010.  That was slightly less than initial projections. Early on, Hulu predicted that it would approach $500 million in revenue for the year.  However, the advertising market slowed during the third and fourth quarters, putting a crunch on the company's ambitious estimates.

"We exceeded our plan despite the soft advertising market (economy) in the second half of 2011," Hulu chief executive Jason Kilar wrote Thursday in a blog post.  "Overall the Hulu ad business grew aggressively and Hulu Plus materially exceeded our plan."

Hulu — a joint venture of media giants Walt Disney Co., News Corp. and NBCUniversal and private firm Providence Equity Partners — does not break out its earnings.  A Hulu spokesperson said the service has become profitable in the U.S. 

However, the company ramped up spending in 2011 to start a service in Japan, which likely was a drag on earnings.

This year should be healthier for Hulu and other media companies because of the rebounding ad market. What's more, Hulu has been concentrating on building its subscription service, Hulu Plus. The original Hulu online video site is still a free offering. Hulu Plus, launched in November 2010 is a more exclusive and expansive offering that costs consumers $7.99 a month.

"We expect our subscription services to account for more than half of Hulu’s overall business later this year," Kilar wrote in the post.

 
Hulu said it was spending about $500 million for programming in 2012.  It recently announced a Hulu Latino service with Spanish-language programming as well as locking up online syndication rights for the quirky sitcom "Community."

"Hulu’s content offering grew approximately 40% versus 2010; Hulu Plus’ content offering grew more than 105%," Kilar wrote.

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Photos:  Top Center:  Alec Baldwin stars in Hulu's inaugural television advertisement in 2009, calling Hulu "an evil plot to destroy the world."  Credit: Hulu.  Bottom right:  Hulu Chief Executive Jason Kilar at the company's West LA offices; Credit: Gary Friedman / Los Angeles Times.

Viewers watching more streaming video on game consoles

Video game consoles aren't just for gaming anymore.

Increasingly, people are using their Xbox 360, PlayStation 3 and Wii devices to stream movies and TV shows, according to a survey released Wednesday by the Nielsen Co.

Because all three consoles readily connect to the Internet, viewers can use them to access video-on-demand services like Netflix, Hulu Plus, YouTube, Major League Baseball Network and ESPN to watch on their TV screens rather than on small computer monitors.

And that seems to be just what consumers are doing. Streaming video accounted for 14% of the average time spent using Microsoft Corp.'s Xbox 360 in October, up from 10% a year earlier, according to a Nielsen survey of 3,000 people.

For Sony Corp.'s PS3, the share of streaming video was 15% this year, up from 9% last year. The shift was even more dramatic for Nintendo Co.'s Wii, which jumped to 33% from 20%.

Xbox and PlayStation users also spent an additional 5% of their time watching movies and television shows they paid to download, an option not available on the Wii.

That's good news for studios looking to make more money through digital distribution. Game consoles, along with the Apple TV, are the most popular ways to reach people who want to watch video on their high-definition televisions.

It's more troubling for television networks seeking to boost their ratings and ad revenue, however. The new data emphasize that consoles aren't stealing viewers' attention just with video games but also with content that serves as a direct substitute for traditional TV watching.

Game consoles have proved particularly effective for Netflix. An earlier Nielsen survey found that half of the users who utilize its streaming offerings do so on the PlayStation, Xbox or Wii.

Two of the consoles are also popular as DVD players. People spend 15% of their time on PS3s watching DVDs or Blu-ray discs. Sony's device is the only console that plays Blu-ray discs and is the best-selling Blu-ray player on the market. Xbox 360 users spend 9% of their time watching DVDs. The Wii does not play movies on discs.

Below is a Nielsen chart summarizing the survey results.

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Photo: The Netflix interface on Xbox 360. Credit: Netflix Inc.

Hulu launches Latino service with Spanish-language programming

Hoping to attract a rapidly growing U.S. Latino audience, online video site Hulu has launched a Spanish-language programming service with popular shows from networks Univision, Estrella TV and Azteca America.

Until now, Spanish-language programming has been scattered across different Internet sites. And some of the most popular programs, including the spicy telenovelas produced by Grupo Televisa of Mexico, were not available online in the U.S. 

Hulu -- which has ramped up its offerings this year -- saw an opportunity.

"The demographics of the U.S. Latino audience are very interesting to us, and until now there was so little Spanish-language content available online in an aggregated form," said Andy Forssell, senior vice president of content at Hulu, based in Santa Monica.

The U.S. Latino population is the nation's fastest growing demographic group. The median age of the Latino audience also is younger than that of the general market, which has helped to attract blue-chip advertisers who prefer younger viewers. 

The Hulu Latino service is being sponsored by five Hulu advertisers: Corona, Modelo, Toyota, Pantene, and Volkswagen of America.

Advertisers and Hulu, owned by media companies Walt Disney Co., News Corp. and NBCUniversal, are particularly interested in reaching bilingual viewers who watch programming in English and Spanish. They believe a large percentage of that audience can be found online.

Hulu has spent the last few months negotiating agreements with 11 Spanish-language content partners, including Univision, the largest Spanish-language media company in the U.S., and other Latin American media companies.

Spanish-language programming will be available on the free Hulu site and through the Hulu Plus subscription service. Hulu Plus will offer hundreds of hours of current and classic shows, including entire seasons of the enormously popular telenovelas, including those produced by Televisa, Venevision and RCTV of Venezuela.

Much of Univision's programming has been slow to arrive online because the company did not have the online rights to the popular telenovelas produced by Televisa until late last year. Two months ago, Univision announced its arrangement to provide its programming to Hulu.

The Hulu Latino service launched Tuesday. Users of the free Hulu service will have access to several episodes of current season programming, including recent episodes of such Univision shows as  telenovela "La Fuerza del Destino" (The Power of Destiny), newsmagazine "Aqui y Ahora" (Here and Now) and late night talk show "Noche de Perros" (Guys' Night Out).

Hulu has rolled out several new offerings this year, including a service in Japan in September. It also has been working to bolster its library with foreign programming including Japanese anime, Korean dramas, and British television programs, including "Misfits" and "Mongrels."

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Photo: Actors from "La Fuerza del Destino," which airs on Univision in the U.S. Credit: Univision Communications

CW network to offer new TV episodes on Hulu

Continuing the evolution of its digital strategy, the CW television network said Friday it would offer online streams of new episodes through Hulu and the Hulu Plus subscription service.

The five-year deal with Hulu comes just two weeks after the CW, a joint venture between CBS Corp. and Warner Bros. Entertainment, announced a similar partnership with Netflix. Netflix will make available episodes of past seasons of CW shows, including "Gossip Girl" and "Vampire Diaries," to its subscribers.

The Hulu deal is different because the service, owned by media giants News Corp., NBCUniversal and the Walt Disney Co., will have the exclusive right to stream episodes of such new CW shows as "Ringer" and "Hart of Dixie" as well as returning series. Financial terms were not disclosed.

The two deals mark a major switch in strategy for the small broadcast network, which until now had tightly held the digital rights to its shows. In a bid to protect its TV ratings, the network delayed the online availability of its episodes and steered viewers to its own advertising-supported CW website.

But by striking deals with such major players as Netflix and Hulu, CW is carving out a new revenue stream, which should eventually allow the network -- launched in 2006 -- to finally become profitable.  Episodes will continue to be available on the CW's ad-supported website.

Hulu's owners terminate sale of online site

Owners of Hulu have taken the pioneering online video site off the market after hoping to fetch $2 billion for the service.

News Corp., the Walt Disney Co. and Providence Equity Partners issued a statement Thursday, saying they decided not to sell Hulu because of its "unique and compelling strategic value to its owners."

Bidding for Hulu had attracted preliminary interest from such notable Internet players as search giant Google Inc. and online media site Yahoo Inc. as well as from traditional television distributors, including satellite TV service Dish Network Inc.

People familiar with the bidding process speculated that the site's owners had not been able to attract sizable-enough offers to warrant selling the 3-year-old site, which has gained traction with online viewers who come to Hulu to watch current episodes of such popular shows such as "Modern Family," "Glee" and "Parenthood."

Hulu's owners positioned the decision differently, saying in joint statement that Hulu has intrinsic value and "Our focus now rests solely on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu."

Comcast Corp. is also a part owner of Hulu, but as a condition of the government approval of its acquisition of NBCUniversal this year, it surrendered any say in the management or operations of the company.

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Photo: A screengrab of Hulu's website on Oct. 13, 2011. Credit: Hulu.com