Essay about Hulu

1063 Words Feb 21st, 2013 5 Pages
All quotations and references refer to “ Hulu: An Evil plot to Destroy the World” unless otherwise noted. 1) Hulu succeeded while everyone predicted its failure due to the following reasons:

* Hulu harnessed existing technologies namely online video and broadcast media to create a new platform that was “focused on helping users find and enjoy the world’s premium, professionally produced content when where and how they want it”. The platform brought together professional content owners/providers, advertisers and content consumers/users in a platform mediated network. * Rather than choose to be a destination site or syndicate content, Hulu chose to be both by being an aggregator of online video. There were web sites that did
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* Hulu also focused on users and offered its service free to them thereby maximising the cross-side network effects between users and advertisers on its platform resulting in increased revenues generated from advertisers.

2) Hulu’s business strategy is to be focused “on helping users find and enjoy the world’s premium professionally produced content when, where and how they want it”. Hulu does this by using Internet technology to bring free content to its users anywhere at any time.
Hulu is a first mover in this space and is currently enjoying the first mover advantage. However with the ubiquity of internet technology accompanied by lower costs and the commoditization of the technology, the barrier to entry will be reduced and more players will be attracted to the profitable online video business, eating into Hulu’s profitability and success. Also, the increase in IT investments in the internet age causes “a Winner-take-all dynamic and high turbulence, as each group of dominant innovators is threatened by succeeding waves of innovation” (McAfee and Brynjolfsson, 2008) in Schumpeterian competition. This makes Hulu’s success vulnerable.

The case mentions that there is already an emergence of competitive threat from “TV Everywhere” and even though CEO, Jason Kilar discounts the effect on Hulu, the new entrant is
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