Original programming critical to Hulu's strategy

Michelle Clancy ©RapidTVNews | 02-02-2012

As his company gears up to launch its first original series, Hulu CEO Jason Kilar is talking up the power of such exclusive content when it comes to future viability for the online video site.
In the online streaming world, differentiation is boiling down to content, as price (sub-$10 per month) and user experience (log in and click) become somewhat commoditised. More and more streaming competition is coming to the table, too: Hulu.com, Amazon Prime, Amazon's new planned service, Blockbuster, Netflix, operator-specific TV Everywhere initiatives and media offerings like HBO GO are all making for a crowded marketplace where players are scrabbling for a limited amount of entertainment wallet from American consumers.

Speaking at the D: Dive Into Media event, Kilar noted that Hulu is looking for “healthy differentiation” through original programming. It's first foray into that is 13 half-hour episodes of a political mockumentary entitled Battleground. It also has planned a Richard Linklater documentary called Up to Speed about lost momuments in American cities, and Morgan Spurlock's A Day in the Life follows a given subject for 24 hours.
“We want to tell great stories that aren’t being told right now,” he said. “It’s important to have some exclusive content."
Being owned by Big Media, including Comcast, Disney and News Corp., doesn't hurt in its quest to beat others at the content game. The company has deep pockets and exclusive content deals for current-season programming from its owners to help balance the cost of developing new series. That, combined with subscription revenue from Hulu Plus, also means that the company can afford to pay other members of the content community (330+ of them) top dollar. Kilar characterised the terms as “extremely generous.”
In fact, Hulu has said that it will spend $500 million on content this year. In contrast, Netflix has been struggling to pay for exclusive TV deals, and recently lost a deal with Starz, one of its only TV differentiators.
Of course, Hulu has a ways to go to beat the market leader. Hulu Plus ended 2011 with 1.5 million subscribers--not bad for its first year of launch, but a far cry from Netflix' 23 million. Also, Hulu isn't the only online streamer looking to leverage original series. Netflix is gearing up for Lilyhammer, featuring Little Steven (of Bruce Springsteen fame) as a New York mobster in witness protection in Norway. Meanwhile filmmaker Morgan Spurlock has created The Failure Club for Yahoo! about people facing their fears, and YouTube has been working on its own original TV channels