Online video left the station a few years ago, riding YouTube to prominence but not to prosperity. Now, an article in the Economist details how Hulu has followed after its groundbreaking cousin, reaping the rewards of the genre YouTube proved could work.
Hulu seems to be hitting the proper chords, with a great interface, browsable catalog, some real crowd-pleasers, and strong corporate backing. I know a few people who don’t have a TV anymore, and Hulu is their television network.
. . . users have been flocking to it, watching 216m videos in December. Just as importantly, Hulu’s inventory for advertisers appears to be sold out. So Hulu is in the rare position of being able to increase inventory (through new content and more views) and make money from it. Hulu now has more than 100 advertisers, including big brands such as McDonald’s, Bank of America and Best Buy.
And according to the CEO of rival Joost, video has a different use-case, creating a passive audience open to advertising:
Films and TV differ from music, says Mike Volpi, ’s boss, in that people watching tend to sit still, whereas people listening tend to move; and people usually watch a show only once but listen to a song again and again.
The business model of YouTube is much more tenuous, and the demands to scale the underlying technology much greater. Hulu benefits from a cleaner business model and a manageable inventory of video. Yes, it grows, but not everyone and their dog is putting up a giggling baby or LOL kitten video.
To me, the lesson is that online business can work when the user’s needs are properly addressed. I think STM publishers can learn from this. Shoveling a journal online isn’t the same as making a good online journal. User interface design, use cases, and well-managed business integrations can make the entire thing work, making it not only painless for the user, but delightful.