Introduction
Hulu Plus is a video streaming service that’s available on several platforms provided they can access the internet. These platforms include traditional web based platforms such as desk tops, laptops, tablets and mobile phones to name but a few; and modern web based platforms such as PS3 platforms, televisions sets among others. As such, Hulu Plus is a partnership between Hulu and media networks and studios some of which include the following: NBC, Fox, ABC, CBS and Nickelodeon . Hulu as a business is owned by three subsidiaries affiliated to NBC, Fox and Walt Disney. These specific subsidiaries are Comcast/General Electric, and Disney-ABC Television Group. It must also be mentioned that, the funding for Hulu is by Providence Equity Partners who consequently own a 10% stake in the company .
Industry Analysis
Given that Hulu as a business is a partnership of three major cable network providers in the United States, it is therefore clear that the company operates in the entertainment industry, specifically the cable and broadcasting industry. Basically Hulu Plus and related video streaming platforms represent the future of not only television across the globe but also entertainment in general. The cable and broadcasting industry is one of the largest segments of the entertainment sector and this industry has been undergoing numerous changes especially in the past decade. The changes in the television industry are motivated by a confluence of many factors some of which include technological advancement, demographic dynamics, economic factors and socio-political factors among others. Based on this premise, it is clear that convergence is one of the key aspects of the entertainment sector in the 21st century and products such as Hulu Plus are based on this ideology .
Basically, convergence allows cable networks the unique opportunity to deliver their content to the public in multiple forms including but not limited to digital material over the same wired, wireless or fibre optic connections. It is therefore clear that convergence in the entertainment industry has to a large extent been shaped by the developments in internet technology and web-based platforms. The direct consequent of the convergence has been that the cable and broadcasting industry has become one of the most highly diversified industries powered the interconnectivity of digital media across the globe . In addition, the power of the industry over its consumers is so immense to the instant that the cable and broadcasting industry is today a trendsetter for most aspects of life ranging from socio-economic to political. As such, based on the magnitude of the industry and the role it plays, change has been inevitable.
The broadcasting and cable industry globally grew by 4.6% and presently the industry is valued at approximately $400.6billion . From this data, it is clear that the industry is one of the most lucrative in the world. In addition to this, it must also be mentioned that television advertisement is the largest segment of the broadcasting and cable industry; this segment singularly accounted for 47.1% of the revenues earned by the industry in 2011. On the hand, the United States accounts for the largest market for products in the broadcasting and cable industry; specifically, the industry generated 44.6% of its revenue in 2011 from the US market. New York and Los Angeles are the two largest contributors to the global market of the broadcasting and cable industry contributing 7.5million and 5.7million viewers respectively .The industry is also projected to grow by 29.3% by the 2016 to a net value of $518.2billion.The projected exponential growth in the industry is spurred by the rising standards of living and therefore globally more and more people have the disposable income to spend the cable network and broadcaster of their choice. In addition to this, the demand for entertainment shall also spur technological advancement and therefore the introduction of new and innovative products such as digital and high definition (HD) players. Finally, presently the major players in the broadcasting and cable industry are Cox Enterprises Inc., Time Warner Cable Inc., Comcast Corporation, Discovery Channel, ESPN, CNN, and TNT among others .
The cable and broadcasting industry has also grown significantly to include both old and new media. As a result, today the internet is one of the largest platforms for sharing digital content from the industry. The sheer fact that the internet can be accessed from any country in the world implies the broadcasting and cable industry has a presence in every part of the globe. This therefore implies that internet coverage is one amongst the many key indicators used to determine the reach of the industry. To this effect, the US alone has 88million broadband network subscribes alongside the 105million mobile internet subscribers. Comcast, one of the dominant players in the cable and broadcasting industry, commands a subscriber base of 17million high speed internet users . This amongst the many reasons why the revenue earned from internet based advertisement in the industry grew by 20% in the US market to $31.8billion. This trend is of course complemented by the growth the “Third Screen” digital content segment. The third screen digital content refers to content that can be viewed on hand held devices such as laptops, tablets and cell phones to mention but a few. In fact it is estimated that there are over 6billion handheld wireless device worldwide.
Competition Analysis
The video streaming segment of the broadcasting and cable industry accounts for revenues estimated to be $3.2billion in North America alone. In fact, it is believed that the video streaming segment represents the future of the industry. Netflix is the dominant player in the segment and commands a market share of over 50% of the market share. Amazon Instant Video, ITunes and Hulu Plus come have a market share of 22%, 16% and 8% respectively. This data is according to research by ABI Research conducted in October 2012. The KPIs used to assess the video streaming segment of the broadcasting and cable industry include but are not limited to the following market share, device reach and business model. It must be mentioned that business model is further subdivided into categories; innovation and implementation.
In addition to being the dominant player in the market, Netflix also scored the highest as far as both innovation and implementation are concerned. Amazon came in second in the implementation category while ITunes came in second in the innovation category. However as far as customer satisfaction is concerned, ITunes has the highest share of satisfied clients; 35% of its clientele base is very satisfied according to the survey. Netflix, Amazon and Hulu Plus have a customer satisfaction level of 23%, 22% and 20% respectively. Finally, the top three content streaming devices are Apples’ IPad and IPhone; Video game consoles and Blue-Ray players and finally Smart television set .
Company Profile
Hulu Plus however, is fast growing and is best placed to take advantage of the market share being slowly relinquished by Netflix. For instance, currently, Hulu Plus has over 1.5million subscriber base and over 100million users across its diverse streaming platform of television based, gaming based and traditional web based devices. In addition to this, Hulu Plus is the market share leader as far as online advertisement is concerned. However, this aspect of Hulu Plus’ product line needs to change because most customers are complaining that they do not pay for content streaming services to end watching commercials. Hulu Plus is also compatible with all operating systems expect Linux; plans are however in place to release a version of the product that is compatible to the operating system just like the same was done for Apple based products.
Hulu Plus subscribers also pay $8.00 for access to the online digital content which is a dollar cheaper than what Netflix charges its customer. This implies that Hulu Plus subscribers and customers get more value for their service given than video streaming service provider has a more diverse, current and large range of digital content compared to Netflix. Generally, Hulu Plus has experienced exponential growth since inception in the year 2010. For instance, total hours of content has grown by 67% from 9,000hours to 15,000hours; number of full episodes have grown by 113% from 13,000 to 28,000; the number of TV series being aired on the service has also grown by 129% from 950 to 2,180; and finally, the number of movies have grown by 222% from 450 to 1,450. All the above mentioned figures were realized within the first one and half years of the product being launched in the markets. This alludes to the fact that Hulu Plus has a very bright future as far as the cable and broadcasting industry is concerned.
Below is a summary of the SWOT analysis of Hulu Plus’ external environment
Generally, the cable and broadcasting industry accounts for the lion’s share of the global advertising budgetary allocation. As such, the industry is bound to be affected by economic factors. This is because the advertising and marketing aspects are usually the worst hit by unfavourable economic circumstances. For instance, as a result of the global financial recession experienced in 2009, the corporate world globally cut its advertising budget by 11%. The overall revenue earned by the industry in the year 2009 improved by 6% from $2.9billion to $3.1billion. However, the revenue from advertising segment of the industry dropped by 2.6% to $1.4billion . Finally, technological advancement is another key factor that affects growth in the industry. This is because the more technology advances the easier it is for the industry to tap into previously inaccessible products. As a result, convergence and dynamism are some of the key characteristics of the industry.
Communication and marketing objective
Hulu plus has several benefits to its users: to begin with, the users of the service can access episodes of television series that once aired on television and are no longer available. Some of these shows include: Ally Mcbeal, X files and Arrested development. In addition to this, the users can also access current episodes of on going shows through television, set top boxes, play station 3, Macs, desktops, I pads and I phones. There are also applications which allow other mobile phone users to stream Hulu Plus from the internet therefore increasing the number of platforms that are available for the users. Unlike the competitors, Hulu Plus also has a version that is compatible with Linux which to the end user who prefers using Linux for their desktop can prove to be quite an advantage since they don’t have to change their operating system in order to access Hulu. This can be quite convenient for the users who can watch episodes of their favourite shows while they are at home, on their way to work, in queues at the bank or the grocery store or during their break at work. They never have to miss an episode of their favourite show or record it. They can watch it whenever they like, wherever they are .
The users of Hulu Plus also enjoy a wide variety of shows from different eras of television. A user can therefore enjoy a movie from the 1950’s in the morning while having breakfast at home then catch up with an episode of Ally Mcbeal, a show from the 1990’s during lunch time on their I pad while at work and finally catch up with episodes on No ordinary family in the evening while on their way home. This wide selection appeals to the dynamic, discerning user who constantly desires to keep abreast with the latest television series and still enjoy the highly rated shows of the yester years. There are also series which are exclusively the property of Hulu Plus hence are aired on Hulu Plus. These series include: Up to Speed, Spoilers, Battle Ground, A Day in the Life and The Morning After. Hulu Plus is also one of the most affordable forms of high definition television that can be streamed online from a wide range of devices. It only costs $9.99 per month to access Hulu plus which offers quite a wide selection of television series and movies .
Marketing objective
Our campaign shall seek to retain 100,000 users of Hulu Plus in the San Francisco area. It must be mentioned that we chose San Francisco because the city not only provides us with the opportunity to tap into new markets but also the fact that our market presence in almost all urban centres such as New York, Los Angeles and Chicago among others is significant. The marketing campaign is geared towards increasing the retention of customers in the area by 30%. 100, 000 users of Hulu Plus translate to about 25,000 households in the San Francisco region. Given that, the average revenue per household is $60 the overall increase in the revenue of the company shall $ 1.5 million over the period of the marketing campaign. The marketing budget shall be $ 300,000 dollars hence the overall return on the investment shall be $900,000.
The communication objective
The communication objective of the campaign shall be to increase the revenue generated by the company through the retention of customers in the San Francisco area. The attainment of this objective shall be through promotional activities that shall be carried out in the course of the marketing period. These activities shall include: users shall be entitled to a free one week subscription after the initial subscription to the service. The communication objective of this activity will be to enhance the knowledge of the product among the first time users in addition to giving them value for their money which in the long run will serve as a means of retaining the customers. In addition to this, the company will also hold free demos at social halls, community centres, schools and churches that are located in the area. The communication objective of this activity shall be to interact with the users of Hulu Plus therefore providing them with an opportunity to ask questions and get answers about Hulu Plus. During these sessions, the clients can also resolve some of the difficulties they may have encountered while using Hulu Plus on the various devices such as television sets, Play Station3, I pads, Smart phones, I pods, desktops and Macs. The other promotional activity shall rewarding randomly chosen users of Hulu plus with a given duration of free subscription to the service. The staff of Hulu Plus shall tour the San Francisco area and reward lucky winners who shall be tuned to Hulu Plus at the time of the activity. The communication objective of this activity shall be to enhance loyalty and therefore retain customers of Hulu Plus to the service.
Monitoring and evaluation of the success of the promotion
The success of the promotion shall be monitored using two methods: questionnaires and gauging the sales made after the promotion. The questionnaires will be handed out to randomly picked respondents in the San Francisco shortly after the end of the marketing campaign. The questionnaires will be designed to gauge the satisfaction of the customers after the open days held at the social halls, the churches and community centres. The respondents will be required to rate the Hulu Plus on the following parameters: customer service, affordability, user friendliness and content delivery. Based on the answers received through the questionnaires, a strategic meeting shall take place in order to evaluate the company’s strategies and determine the direction to be taken having identified the weaknesses and the opportunities that exist for improvement.
The other method that shall be used to evaluate the success of the promotion will be sales generated after the promotion. Having sensitised the clients and would be clients about Hulu Plus, it is expected that the volume of sales is bound to increase. The sales will not only be gauged in terms of the volume increase but also in terms of the return on the investment spent on the campaign. In order to have a more accurate portrayal of the sales, the sales prior to the marketing campaign shall be recorded. The sales during the roll out of the marketing campaign shall also be recorded. The sales in the period immediately after the marketing period shall be recorded. After this, sales made every subsequent month shall be recorded. Based on the cumulative sales, the effectiveness of the promotion shall then be analysed.
Based on the aforementioned methods of gauging the success of the marketing campaign, the following measures can be undertaken in order to improve on the outcomes of the campaign: to begin with, the future marketing campaigns shall be spread throughout the year in order to maximize on the gains made as a result of promotional activities. This is in line with the marketing principle which states that “share of the mind is share of the market.” This will also be geared towards silencing the competitors hence increasing the dominance of Hulu Plus in the market.
The open days shall involve activities that are geared towards improving the lives of the community members. In so doing, Hulu Plus will have become a more active participant in the lives of the community members therefore ensuring that their impact continues to be felt even beyond the period of the campaign. Some of proposed community activities that Hulu Plus can engage in include: tree planting, visiting the local children’s hospital and equipping them with Hulu Plus and also sensitization on the management of e-wastes at the community level. In
Hulu Plus can come up with a game show which could be part of the content that it delivers to its users. The participants of the game shall be users of the service drawn from different regions who shall take up different challenges aimed at demonstrating their prowess in using Hulu Plus. The winners of different rounds can enter a grand draw and then win an ultimate prize that shall be offered by the company. Hulu Plus could also come up with bouquets for communities which allow people in a community to get a given discount should they sign up as a group for the service. This will be an enhancement of the reward scheme for loyal customers who were rewarded during the promotion. In so doing, the company can not only boost its sales but also its presence within the targeted region and therefore gradually increase its revenue.
Works Cited
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