Hulu Marketing Challenges
Geographical limitations, sharing of accounts, advertising inventory, and advertisement capping are 4 challenges faced by Hulu in terms of both marketing to potential advertisers and marketing to subscribers.
Challenges in Marketing to Subscribers
- Being limited to United States only, the company is restricted from accessing the global market.
- This severely restricts the company's ability to gain higher revenues and subscriber count.
- The recent acquisition of Fox properties by Disney resulted in Disney becoming the largest stakeholder in Hulu.
- According to many sources, Disney plans to make Hulu an international platform.
- The company recently announced a bundle plan of its three streaming services — Disney+, Hulu, and ESPN+.
SHARING OF ACCOUNTS
- A recent survey from Magid revealed that "roughly 35% of all young consumers share their passwords."
- According to the survey, they share passwords at a rate of 42%.
- This, in turn, hurts the business model and the monetization of the premium services provided by the platform.
- It also recedes the subscriber count growth.
- The challenge is equally affecting other streaming services in the market, like Netflix, HBO, and other pay-TV services.
- There are no current plans by the company to overcome this challenge.
Challenges in Marketing to Advertisers
- For years, Hulu had a limited ad inventory available for its advertisers.
- In the past, Hulu limited its ad inventory so that its platform does not get overrun by ads.
- Advertisers see Hulu as a very favorable OTT ad platform, as they consider it to be sure and certain.
- According to Kristin Scheve, svp and media director at Digitas, Hulu "is a trusted one-stop shop to get premium content in a premium TV-like environment."
- The company recently increased its ad inventory, in light of its growing ad-supported subscriber base.
- Quoting Christine Peterson, U.S. digital investment lead at Mindshare North America, "Earlier over the past year, we were having more challenges with inventory availability, but Hulu’s made some very smart strategic moves in how to continue and increase their distribution, increase their consumer base and make more inventory available."
- Hulu recently limited the ad interruptions on its platform to 90 seconds.
- The move effectively removed " half of the commercial time that had previously run in its programming" as reported by Ad Age.
- The company has been enforcing the ad cap since early 2019.
- However, it officially informed its participating networks (including NBC, Fox, Turner, and Viacom) about the ad capping in April.
- The company's move is considered to be unpleasant to its ad partners, who up till now had been able to mostly control their ads.
- To attract advertisers, Hulu is testing and planning several innovative methods of ad presentations.
- Its recent "pause ad" feature was tested on a pilot with Coca-Cola and Procter & Gamble's Charmin.
- The company is also testing better ad analytics to provide advertisers with "more granular data on the viewers watching ad-supported content."
For this research, we went ahead and scoured the press releases by the company. We hoped to gain insights into various problems faced by the company when marketing to advertisers or subscribers. However, the company press releases only contained information related to recent changes, upcoming shows, and planned features.
We then conducted a press scan related to Hulu and its advertisers/subscribers. This was done to gain third party insights into any challenges faced by Hulu in terms of both marketing to potential advertisers and marketing to subscribers. After going through several articles on Hulu and its relationships with its advertisers, we concluded that Advertising Inventory and Advertisement Capping are two challenges faced by Hulu when marketing to advertisers. These challenges affected the relationship between Hulu and its advertisers and limited the advertising potential of the platform.
We next scanned the market analysis of Hulu's subscriber growth by market experts. This was done to gain insights into challenges faced by Hulu when marketing to subscribers. We identified geographic limitations and the sharing of accounts as two challenges faced by the company, as both these issues affected the growth and number of subscribers to the platform. In the case of account sharing, separate research to find any specific steps taken by the company to address the issue. After looking for news and media associated with the topic, we found that the company has been solely focusing on increasing its consumer base and ad revenue. The company had not paid any special attention to the problem of account sharing as it has only recently started affecting the VOD market. In addition to the research, analysis of the data has also been done to correctly gauge the challenges and their perceived effect.