A Big 2012.

We are closing on a big 2012. On behalf of the Hulu team, I would like to share some of our results. We’re so thankful to our customers and for the trust they place in us each day, which is enabling us to deliver the below results.

Revenue

In 2012, we will close the year with approximately $695 million in revenue. Hulu’s revenues will have grown over 65%, which is an acceleration over 2011 growth levels. Revenues from our first 5 years:

Hulu Plus

We have more than 3 million paying Hulu Plus subscribers. The number of Hulu Plus subscribers has more than doubled over the past year. Our subscribers from the past two years (we exited private beta and officially launched in November 2010):

In 2012, Hulu Plus was released on Apple TV, Nintendo Wii and Wii U, Windows 8 tablets, and a slew of new Android tablets and phones. Hulu Plus can now be accessed from more than 320 million Internet connected devices in the U.S. (not including laptop and desktop computers). We released next generation user experiences—to great response—across the web, on gaming consoles, and on Android tablets and phones.

Content

Throughout 2012, we aggressively grew our Hulu and Hulu Plus title offerings by over 40%, making us an increasingly valuable partner for our three customers (viewers, advertisers and content partners). We now have more than 430 content partners, providing over 60,000 TV episodes, 2,300 TV series, and 50,000 hours of video on Hulu and Hulu Plus. In 2012, we invested more than $500 million in content. Since the launch of Hulu in October 2007, we have generated over $1 billion for our content partners.

One of the highlights from our 2012 content investment is the launch of Hulu Kids on Hulu Plus. With this launch—and our expanded content partnership with Viacom—Hulu Plus has become the only online video subscription service with current season content from Nickelodeon. Hulu Plus now offers current season episodes from more than 235 of the most popular television series on TV in the U.S., and over 40 series on TV from across the globe…something no other online video service offers. We launched more than 25 Hulu Exclusive and Original Series combined, and signed new agreements with the likes of CBS and WWE, just to name a few. We are extremely proud of the TV series we released in 2012, and are excited about the slate of original series and exclusive series coming to Hulu in 2013.

Advertising

Our advertising mission is to be the world’s most effective video advertising service, and we are well on our way. We continue to expand the number of advertisers we serve. In 2012, we served more than 1,000 advertisers, 28% more than last year. Our advertising service consistently sets the standard in online video advertising, including our practice to only charge advertisers when their ad has been streamed through completion.

Hulu Japan

Our subscription service in Japan continues to ramp.  Our content offering has quadrupled over the past 12 months. Hulu Japan is now accessible from more than 50 million Internet connected devices in Japan (not counting laptops or desktop computers), thanks to releases on Apple TV, Nintendo Wii, Wii U, and over 40 Android mobile phones and tablets in 2012. As a result of the above inputs, we are attracting paying subscribers to the Hulu service in Japan at a volume that is more than triple our December 2011 levels.

When it comes to building things that matter, most entrepreneurs hope to have the good timing and the good fortune to find and ride (and ideally shape) one massive wave. At Hulu, we are doubly fortunate in that we are at the crest of two massive waves that we believe will persist for the long term: the rise of online video advertising and the rise of online video subscription services.

As we’ve built and grown Hulu since the summer of 2007, so much has changed along the way from building our first website to now generating almost $700 million in revenue this year. There has been one constant, however, which is the Hulu culture; it is what defines us. Ours is a culture of obsessing over our customers, insisting on atypically high quality (to the point that most reasonable people will think that our standards are too high), and relentlessly pursuing better ways in all that we do. For Hulu, culture is the input that matters most.

On behalf of the team, please know how grateful we are to you, our customers, for your belief in us and for the privilege to innovate each day.

Jason Kilar
jason@hulu.com
CEO, Hulu


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Q: What does native frame rate mean?

A: Native frame rate refers to the frame rate the source footage was shot. Whenever possible, we require all videos to be delivered in their native frame rate. This means that no frame rate conversion should be performed, which includes adding 3:2 pulldown for broadcast.

Stress mark should be marked with [capitals] to indicate the primary stressed syllable, as in: news・pa・per [NOOZ-pey-per] in・for・ma・tion [in-fer-MEY-shuhn]

On living room, mobile, and tablet devices, the color gradient overlay is dynamic and will change based on the cover story art. It is not something we can control on our end.

If the tagline/date messaging doesn’t fit within the 11 syllables max, it can be included as text.

On living room, mobile, and tablet devices, the color gradient overlay is dynamic and will change based on the cover story art. It is not something we can control on our end.

  • No symbols such as registered marks, copyrights, etc.
  • If symbols are required, they will be presented in standard text such as" Brand (TM)".

Q: When is letterboxing allowed and not allowed?

A: When the native aspect ratio is 1.78:1 or 1.33:1 throughout the entire program, there should not be any letterboxing (black bars on top and bottom), nor should there be any pillarboxing (black bars on either side). We should should see an active picture take up the full frame. If the aspect ratio is wider than 1.78:1, such as 2.35:1, matting on the top and bottom is permissible. Additionally, if there is a creative choice to add matting or if there is a mix of native aspect ratios, this is usually waived, but please reach out to your Hulu representative to confirm.

Q: Should the bitrate be constant if delivering ProRes codec?
A: No, since ProRes codec is built to be variable, this is waived.

Q: Can you accept bitrate higher than 30 Mbps?
A: Yes, we can accept bitrate beyond the recommended range for H.264 and ProRes. In the case of ProRes, bitrate will often exceed 30 Mbps due to its variable setting.

Q: Why do you ask for progressive?

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Q: Why do you prefer PCM codec?

A: PCM codec is lossless audio quality, so whenever possible, please deliver PCM audio.

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Hulu Newfront

Green Is Good Digital Hub

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Q&A With
Gadi Amit

Founder, New Deal Design

Gadi: The development of serendipity in recommendations is very important. An analogy I use is that of a restaurant. If you go to a good restaurant, you don’t always want to see what you’re looking for. You’re looking for surprises. It’s not the expected, it’s the unexpected. You trust in the restaurant’s atmosphere. You don’t know exactly what you’re getting, but you trust their creativity and that you’ll enjoy whatever they serve you.

Do you think it is possible for a streaming service to become that “restaurant” - a trusted source of serendipitous recommendations?

Gadi: I absolutely do. But it is difficult. It’s a long game. It requires them to build trustworthiness with audiences through genuine content recommendations over the years.

Q&A With
Gandi Amit

Found New Deal Design

Gandi: The development of serendipity in recommendations is very important. An analogy I use is that of a restaurant. If you go to a good restaurant, you don’t always want to see what you’re looking for. You’re looking for surprises. It’s not the expected, it’s the unexpected. You trust in the restaurant’s atmosphere. You don’t know exactly what you’re getting, but you trust their creativity and that you’ll enjoy whatever they serve you.

Do you think it is possible for a streaming service to become that “restaurant” -- a trusted source of serendipitous recommendations?

Gandi: I absolutely do. But it is difficult. It’s a long game. It requires them to build trustworthiness with audiences through genuine content recommendations over the years.

Q&A With
Jonathan Miranda

Emerging Strategy Principal, Salesforce

Another expectation among younger generations seems to be personalization. How are you seeing this play out in media?

Jonathan: If you go into the world of advertising and marketing, customized, personalized advertising is more important than ever before. There’s a realization that eight years of funny commercials that we’ve showed everybody probably for the fourth time, doesn’t work anymore. So there’s a lot of companies moving towards specialized advertising.

How does this type of personalization translate to personalizing content beyond advertising? Who’s going to predict what people will want to watch, and do it first?

Jonathan: It’s not about being the first to predict what people want to watch. It's different. It’s about getting viewers to browse. You want to show them the value of all of the money Hulu has spent and the great range of TV and film for them to choose from.

Q&A With
Julie DeTragila

Head of Research & Insights, Hulu

Julie: There are vast differences between the way under 35-year-olds watch TV and over 35-year-olds watch TV. I grew up in a world where there were maybe 10 channels, and my viewing changed as technology and options changed. Younger viewers started from a really different place. Everything has always been on-demand. Anything they ever wanted to see was available to them, and they therefore have different expectations for TV.

How so?

Julie: One of the things we found with Gen Z is that they really want to be immersed in something for a long time. They want to have content that they can live with for a while; it’s like this long, seamless storytelling. They’ll knock off a couple episodes a night and it will last a couple of months. And then they’ll re-watch it a million times over.

What other shifts have you seen happen-with Gen Z but also more broadly-with the rise of streaming?

Julie: For years, television had to deliver a specific rating. Shows had to appeal broadly or else they wouldn’t survive. And those days are long gone because, with streaming services, shows can reach hundreds of thousands of people or tens of thousands of people and still be considered successful. There’s more experimentation with the types of content; we’re not locked into an hour, a half hour, a comedy, etc. The industry can create really niche shows to appeal to niche audiences, but also simultaneously create big, broad experiences that are shared by millions.

Q&A With
Larissa May

Founder, #HalftheStory

Your work focuses a lot on Gen Zs who, for better or worse, are dubbed “digital natives.” How do you think a generation of digitally native audiences view digital content differently than older generations?

Larissa: I think for young people digital content is a way they’re able to explore their own identities through the story... They want to see themselves and their stories in the content that they’re engaging with.

Tell us a little more about this digital content as Gen Z’s form of self-reflection.

Larissa: Digital content is sort of like a currency. I find that young people want to watch things that their friends are watching so that they can have conversations about it. For example, with Euphoria, young people were just kind of in love with the characters. It was very timely and a bit provocative, and then there was a way that they could see themselves in these stories and connect with their friends about the topics and ideas in the show.

And then also they could almost embody these characters in their own life. I really do think that the TV shows that young people are buying into are actually influencing their culture and their trends and even their language that they’re using.

Q&A With
Richard Frankel​

Global Creative Director, Spotify

What does the future of personalization look like?

Richard: I think it’s all down to trust. We're going to see more opportunity on platforms like Hulu and Spotify where the user trusts us.

That’s really interesting. Another area we wanted to explore is podcasts, and their relationship to video. For example, the show Homecoming is an adaptation of a podcast; the podcast Office Ladies is a spin-off from a TV show. Why do you think the two formats work so well together?

Richard: Anything at all that drives conversation in pop culture, and TV does a lot of that, is worthy of consideration in a podcast environment. Any of these conversations can become multiple audio streams that evolve with experts, interviews, and all kinds of narrative threads that can flesh out characters, or narrative development, or whatever's happening in those shows.