Hulu breaks 300 million view barrier

March 26, 2009

This week, Hulu released comScore’s latest VideoMetrix chart that shows the site broke through the 300 million views in a single month barrier. This barrier is significant for a few reasons: 1) it’s higher than I thought it would be, so I’m humbled; and 2) it’s roughly the same number of streams that Comcast does each month in its onDemand system. To illustrate both points, let me quote myself from last October when Hulu reached a meager 150 million views:

This is phenomenal, it’s precisely the year-end target I had for Hulu in December. Now I have to ratchet that up to 200 million. To go from 0 to 200 in under a year is remarkable. Consider that in its best months, Comcast VOD streams 300 million video views. That’s a big number. Hulu will be at the level some time next year. Without having to invest in VOD servers the way Comcast did. (See my original blog post for more.)

Let me reproduce the VideoMetrix chart (source: comScore, February 2009) so we can do some analysis.

comScore Video Metrix February 2009

Quick note for those new to this kind of stuff, “aHulu (Hybrid)” refers to the fact that some portion of Hulu’s views come from its syndication partners like AOL and MSN. That means any Hulu views that occurred there are not counted there, instead they count back at Hulu. We don’t have any solid estimates of what portion of views are coming from Hulu.com itself vs. its syndication partners, but I have a hunch it’s shifting more toward Hulu over time as Hulu has attempted to brand itself more aggressively.

Looking at this chart, we can do some fun math (I know, not two words you’re used to seeing together). We can see, for example that the average viewer is watching Hulu about 16 minutes a week, far ahead of everyone but YouTube (which accounts for the lion’s share of the Google Sites line). That means the average viewer might watch a show every other week, which indicates the beginning of a habit. Hulu beats everyone else in minutes per stream, at 6.7 minutes, comapred to 3.5 for both Google and CBS. That’s obviously because Hulu people are watching full-length content. Most interesting, though, is the fact that Hulu now accounts for 5% of all online video viewing minutes. The only other site that has more than a single percent of viewing minutes is YouTube, which accounts for 29% of viewing minutes.

Yes, YouTube still rocks the house. But Hulua is clearly the second most important US online video provider. 

And it has only been in business for a year. I’m starting to regret boasting about the fact that I never saw Hulu as a YouTube killer the way some people did when it was first announced. While it’s not technically a YouTube killer (these numbers attest to that), it’s certainly a YouTube distractor since it actually has a model for making money from these views, which  YouTube does not. 

 

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2009 is the year of the Connected TV

March 12, 2009

(sorry to long-time readers for the recent radio silence — between traveling and coming down with two successive bouts of some kind of flu, I have not been keeping up my end of the deal. I’ll make it up to you, I promise :)

I wrote about Yahoo’s TV Widget Engine in January, calling it the Belle of the CES Ball. I still stand by the sentiment, so much so that I wrote a very deep dive on the concept for Forrester clients which was just published this week. If you’re a client, check out the report here (and even if you’re not a client, you can see a summary at the same link). I won’t give away the precious detail here, but let me riff about the report’s implications a bit.

The most important thing Yahoo’s TV Widget Engine does is open a platform for innovation in the connected TV space, I said that before in the original post. However, the innovation that will matter most is programmer-led innovation that enhances TV viewing, by adding interesting information and interactivity over the live TV experience.

Why should content owners do this? Becuase this is the first technology innovation in a decade that will actually encourage live viewing of television. 

What do I mean? Already, there are people who keep their laptops on their laps (where else?) during American Idol or Dexter so they can chat with friends or follow Twitter conversations related to the show. NBC even encourages people to text to a special SMS number during Heroes to get special updates and clues during the show. But all of those exepriences are outside of the TV screen and therefore limited to the few people willing to manage multiple devices. Imagine if broadcasters and programmers could do the work for you, overlaying the experience on the TV screen to increase your enjoyment of the show — as well as your desire to watch it live when the online buzz is the greatest.

The problem is we have a short window in which content owners (networks, producers, publishers, etc.) can establish the habits that will favor them in the long run. If they don’t catch on quickly, they’ll miss this chance to drive *gasp* actual live viewership and instead, technology innovators will focus on widgets that deliver other benefits that aren’t programming-centric. I personally think weather, horoscope, and personal ad widgets — while of interest to specific subgroups — will never catch on on the TV to the degree that program-specific widgets will. Why? Because people watch TV to watch TV, not read the news or scan personal ads. That’s what the PC is for.

Am I right? We’ll find out soon enough because Verizon just announced that later in the fall it will be pushing an open-widget development platform to its Verizon FiOS TV customers’ set top boxes. For those who did not know, Verizon has been developing widgets since 2006. However, the widget environment was proprietary and did not allow outside parties to contribute. Verizon has changed that with this latest version and as a show of force, it has built a Twitter widget designed to automatically scour tweets to find any that mention the show that you are currently watching — change the channel, and the widget will search for and display any new tweets related to the new show on your screen. 

This is a genius move. It demonstrates the value of synchronizing widgets with live TV without waiting for the Yahoo! widget platform to find its way into homes.

If I’m right (and Verizon finds a way to let customers know about this feature — which is always a problem when you push free features to set tops, most people never know they’re there), Verizon’s 1.6 million customers will be a very attractive test best for interactive TV widgets. If you are a developer, get hopping, let’s see what you can do.


Why Hulu is clashing with potential partners

February 23, 2009

Two news items from last week are worth commenting on in the same post:

  1. Hulu insisted that Boxee pull its Hulu player from Boxee. For the un-nerdy, Boxee is the open-source media player software that I put on my Apple TV a few weeks back. Until last week, it allowed you to access Hulu online videos direct to the TV without the help of a PC. 

    The Boxee/Hulu experience is tremendously satisfying. Plus, it preserves all the advertising that Hulu needs to sustain itself. However, by making it super easy (some might say, convenient) to get online TV shows to the TV, Boxee is a threat to Hulu’s content partners, many of whom are still petrified about cannibalizing linear TV shows. So while those partners may be willing to support PC-based viewing, the moment Hulu is easily accessed on the TV, they get creeped out. Never mind that 5 million PCs in the US are currently connected to TVs for exactly this kind of experience — far more than AppleTV or Roku will ever have.
     

  2. Hulu pulled its content from syndication partner TV.com. TV.com is a CBS-owned TV fan site that previously focused on chat rooms and clips, but as of a month ago announced an online TV player strategy designed to monetize its 5 million viewers more effectively. The secret sauce was access to Hulu content (Fox + NBC) as well as CBS content, delivered through a player experience that was remarkably Huluesque.

    Design infringement aside, it’s hard not to see this one as an effort by Hulu to persuade CBS to allow CBS content to join the Hulu experience. If it’s not such an effort, it should be. Hulu is eager to allow syndication partners like Fancast and IMDB to succeed, but it doesn’t really want to enable CBS to have all the benefits of Hulu content without having signed up to be an official part of the system. Seems fair. Honestly, the only reason CBS wouldn’t want to do this is it would mean acknowledging that its costly and time-consuming solo syndication efforts were not enough. 

What’s going on here: Hulu is getting more and more powerful every day. And not just because it managed to get Alec Baldwin to promote it during the Super Bowl. It’s because Hulu gives people the thing they want most: easy access to top TV shows. But with great power comes great responsibility, at least in the mind of TV execs who suspect that Hulu will eventually erode their TV business (which has been steadily eroding anyway, not on an overall basis, but on a per-show basis).

With ad dollars tightening in a recession — across the board, mind you, not just in online video — TV execs who never liked the idea of online video in the first place are going to claw their way back into prominence inside their companies and start arguing for more restraint. We’ll see more removals of TV shows like The Mentalist, more announcements like that from SciFi about postponing Hulu streaming of  Battlestar Galactica until 8 days after broadcast.

All of this is part of something I call the coming online video backlash. It’s going to take this whole year, and it’s going to inspire a lot of hasty moves on the part of TV executives to pull previously available content. And consumers are going to hate it.

I don’t envy Hulu’s position in this. It has to keep the lines of access open to the providers of top TV content, but it has to make good on its promise of serving viewers. So far, it has done a great job, but at some point, it’s going to be forced to do something that will begin to tarnish its brand. I don’t personally think the Boxee removal qualifies — only a few tens of thousands of us are nerdy enough to have hacked our Apple TVs — but sometime soon, somebody at Viacom or Fox or Sony Pictures will recall content that was previously available. Expect it to happen around sweeps weeks or the season finale weeks. It’s gonna get ugly.


Everyone’s a video producer now, are you?

February 19, 2009

I’m spending a few days at the Omniture Summit in Salt Lake City. Yesterday I was invited to speak on the topic of (what else?) video,  along with Jeff Jordan from Omniture and Carmen Sutter of Warner Music. It was somewhat of a follow-up to an Omniture Webinar Jeff and I did in December.

It was a great session — Carmen shared some fabulous details about how they use video to keep fans connected to Warner Music artists. (Two fun facts worth sharing: 1) Fan-submitted videos represent a significant number of the videos on the artists’ sites, but account for only 5% of views, as Carmen explained it: “Fans came to see the bands, not each other.”; 2) People who use the audio player on the site rarely ever also watch videos, she attributed it to an age thing, the bands that attract young audiences have fans that want to watch stuff, the bands with more aged followers have fans that have yet to catch on to video but understand streaming audio.)

In the Q&A someone raised the very valid point that everyone’s talking about how video is the next big thing, but nobody’s talking about how hard and expensive it is to produce decent-quality video.

That’s a question I’m uniquely positioned to answer because I paid my way through my (first) grad school by being a video production guy and later video editor at a traditional analog video edit suite. I’ll skip the nerdy details, but I know a lot about how hard it is to shoot good video on the cheap. 

I answered the question by saying that it’s true that good video is costly to produce. However, there is a subtle way to at least minimize cost and that is by identifying what “personality” you want your videos to convey. Once you have a style and a personality that your videos will adhere to, it removes a lot of the uncertainty in the production process. Reduced uncertainty=more manageable costs. The Blendtec guy is probably the easiest example to cite: once he decided that his approach was the mock-serious lab coat in front of a locked-down camera, that settled all the production decisions from there forward. (Never mind that it costs him a few hundred dollars to blend an iPhone.)

The second point to come out of that discussion was that by having a distinct personality, you train your viewers to expect that from you and you build the likelihood that — for those who like the personality you conveyed — they’ll want to return to see more. This, by the way, is exactly what major Hollywood producers and directors do. You’ve seen one J.J. Abrams piece, you’ve seen them all (or, in my case, you’ll want to see them all).

Anyway, it’s great timing to be talking about who has what it takes to become a video producer because Daisy Whitney at TV Week did her New Media Minute about this very topic, showcasing a variety of Internet video projects that try to do exactly this. Watch and learn — thanks for sharing, Daisy!

Vodpod videos no longer available.

Online TV show ads in peril?

February 13, 2009

A few weeks back I asked you for evidence of whether online advertising was showing signs of growing or shrinking. I got some feedback, but none of a smoking gun. Then I spent a few sick days watching a lot of Hulu on my TV screen. I mean, a lot. (I even took a brief look at that Heroes movie with Henry Winkler and Sally Fields that keeps showing up in my recommendations queue for obvious reasons. Talk about a very obvious database-matching exercise gone awry.)

If you haven’t watched Hulu lately, check it out. Are you seeing as many PSAs as I am? I didn’t know the Air Force had so many ads to show. And I didn’t know there were that many eco-friendly organizations as I’ve met lately on Hulu.

I’m even talking about top shows like The Office or House. Is it possible they aren’t selling out their inventory on these great shows? Gratefully, I was spared the flood of PSAs once I started catching up on Battlestar Galactica (BSG). Sponsored by DirecTV, BSG affords a perfect example of online video advertising done right. Yes, DirecTV sponsors the whole show, but each ad is different. Featuring John Michael Higgins in the fictional board room of a generic cable company in panic, these ads deliver. They’re so funny they actually make me wish that satellite TV wasn’t headed for the sidelines.

But brilliant touches like these are few and far between. Again, I’m asking you: is online TV advertising in danger of failing to support this fledging new medium upon which so many millions of us have become dependent?


Roku’s next steps: Hulu, then Yahoo TV Widgets

February 12, 2009

If you read this blog often, you know I’ve been road-testing a lot of set top boxes for the past two years. I do this because I cover video, but also because it’s a disruptive moment in the history of the video and if there’s lessons to be learned about disruptive innovation, this market provides ample opportunity to be tutored. (All props to Clay Christensen at HBS, by the way, for defining the way we all look at disruptive innovation. That’s worthy of a separate post at a later date.)

After spending significant time with the Roku box during some recent sick days, I have concluded that the Roku is still the box that delivers the most punch, especially considering its price. That’s why the Roku box won our Convenience Quotient analysis on set tops last summer and it’s only getting better as the Roku team adds more content. 

The Roku is the only box that I want more than one of — one for the living room and one for the family room.

But it still has a long row to hoe if it’s going to end up in a million homes. In particular, I see a threat in the form of connected TVs. I’m writing a piece for Forrester on that topic right now, should be out in a few weeks, but the conclusion is pretty optimistic: thanks to supply-side energy, the Yahoo TV Widget space is making it likely that connected TVs will be in more than a million homes by year-end, possibly two million.  

So here’s my prescription for Roku to stay in this game. I haven’t discussed these things with the team there, but I’ll make them a matter of public record so that if I’m right or wrong, at least I’ve been bold.

1 – Get going on Hulu. This might mean starting with CBS (which is dramatically more open to radical syndication moves, as evidenced by the YouTube relationship) or Viacom, as a way to show Hulu that this is the way things are moving. The sooner ad-supported TV shows up on Roku, the sooner it’s a must-have $99 box for everyone.

2 – Become the first set-top box to implement Yahoo TV Widgets. I cannot get this widgets solution out of my mind. It’s such an elegant way to open the market to innovation and I like innovation. From what I’ve learned from the people in charge of the Yahoo TV Widgets strategy, the code to accomodate the widgets should be relatively simple to put on the moderately powered Roku box. But the beauty of having widgets on the Roku box is it would immediately relieve Roku of needing to strike separate content deals with every possible content provider. Instead, it can just let content providers develop whatever they want for the platform, making the box more valuable with each passing day. 

The fact is, every box, DVD player, TV, and game system (Wii Widgets?) will eventually implement Yahoo TV Widgets. (I know that’s music to Yahoo’s ears, but when you do the right thing strategically, it tends to work.) So Roku better hurry. 

Last thought: once these steps have been conquered, it’s time to start courting HBO and other pay TV providers to discuss delivering subscription-based content to the Roku. Not something HBO wants to do (not something Comcast wants it to do), but it’s where things are heading. And as long as HBO is priced higher on the Roku than it would be through Comcast, which is certainly what HBO would have to do, it might be feasible by 2010. 

What do you think?


Sick day with my Boxee-enabled AppleTV

February 12, 2009

Sorry for the radio silence on my blog. I’ve been down for a few days with the same thing everyone else seems to have. But since I’m a workaholic I had to get some value out of my sick time so I spent as many hours as I could watching TV, movies, and miscellaneous video. All in the name of research, of course.

A few things I learned:

  1. The Roku Player’s HD quality is surprisingly good. The upgrade happened earlier this year. Yes, I have hit a few buffering issues as many predicted would be the case — even though I’m on fiber and wired ethernet. But the quality is still sharp and the selection, thanks to Netflix, is expanding dramatically. My wife is getting her Jane Austen fix, my kids are watching all the kids shows they want, and I’m catching everything from PBS documentaries to Clash of the Titans (what kid rasied in that era doesn’t want to see Clash of the Titans again). Not all of that content is available in HD, but we don’t seem to care.
  2. HD DVRs are a pain. I don’t even record The Office and 30 Rock in HD anymore because it takes up way too much space and those aren’t shows that need HD quality to be funny. Lost, Heroes, and Fringe are all still on my HD list, of course. Even nerds have their standards. 
  3. My Boxee-hacked AppleTV seriously rocks. I mean seriously. With Hulu in there, I did a ton of catching up, including things that were already recorded on my DVR, but with faster access to them on the AppleTV I found it more convenient (if you know me, you know convenience is my watchword) to watch via Boxee. I also started really playing with the personal media sharing that Boxee enables from the home network. It’s as clumsy as most other home-media sharing solutions, but I can see it getting better. Now if Boxee only had a business model. But it is now available in Alpha for Windows, so we’ll see how far it can go before it needs some revenue.

Most of all, I have learned that if I needed to buy a second of any these devices, I would buy the Roku. It’s a bit of an act of faith, on the assumption that more content is coming (a separate post on that coming later). But the price is right and we spend hours watching it. Having a second one for the other TV room makes sense. It’s cheaper than the premium you’d pay to build Netflix into an LG or Vizio TV, and it’s more flexible. But I get ahead of myself, I’ll post on that as a separate topic later today.