Hulu: An Evil Plot to Destroy the World Harvard Case Solution & Analysis

1.     Should TV networks (broadcast or cable) collaborate with Hulu? Or, should they reserve content for their own online network streams? Is there middle ground? What can we learn from early adopters as well as the networks who were late to join the party?

The US television households comprised of about five primary broadcast networks. These included CBS of CBS Corporation, ABC of Walt Disney, NBC of General Electric, FOX of News Corporation and CW which was a joint venture between Time Warner and CBS Corporation. These all networks reached to almost 90/5 of the households in United States. These networks reached to all of the households either through stations that were owned by these broadcasters or either by third parties. These broadcasters and cable operators are now going in the area of online TV. They then started to offer online episodes to their users.

With the flow of the time and the changing technologies of the world, online streaming is now gaining popularity. The TV is being taken online to the maximum level. This is because this gives its users a lower cost and greater flexibility to watch whatever and whenever they want. The users can access the content freely without any restrictions on time. If we look at the analysis and research conducted in history it has been seen that an average customer spent about monthly 146 hours to watch the television in the year 2011. While on the other hand a person on average watched 4.5 hours of streaming videos. However, the number and the time of the customers watching television declined significantly in 2012. Still it can be said that the gap between the average time of TV watching and online streaming is larger but this gap is mainly attributable to those people who watch TV just because of sports events and to also watch the daily news updates.

On the other hand, if we compare the growth rates of online streaming and watching TV there is also a very big gap. The growth rate of watching online streaming videos per year is about 7%, while on the other hand the growth rate for watching TV per year is just 0.9%. If online streaming websites are considered than Youtube is on number 4 which is the most visited website by the people of United States. Youtube accounts for about 45% of the total streaming videos. These all facts show that the TV is losing its meaning over the years while on the other hand online streaming is gaining popularity.

The two types of networks apart from the online streaming network is the cable network and the broadcaster’s network. These both networks generate revenues differently. The primary source of revenue for the broadcaster is on air advertising. Networks include about 30 second’s long commercials which are fitted in 20 slots to pay for this programming. Everyone knows that broadcast networks are free for everyone however, a third party carrier or cable provider gives these services for a fee.

On the other hand cable operators generate revenues through subscriptions. These cable operators normally sell their services to other intermediaries at a wholesale price. This price is charged basically on a monthly basis. Some of these platforms include Time Warner, Xfinity and Comcast. The cable network model is one of the successful model for revenue generation. These cable operators charge a specific revenue fee and their revenue stream is constant.

It would be beneficial for TV and cable operators to collaborate with Hulu because the trend is changing. People are valuing online streaming more as compared to TV and cable network. Although TV is an essential part of the people of United States for everyday but the technological progress making everything instantaneously available anytime anywhere is attracting more and more users.

Another reason for which the cable operators and the TV networkers should collaborate with Hulu is that these two types of networks are less flexible and also there is the potential for the clutter. These kind of services such as the cable and the services of the satellite are structured in the form of a package. Those people that subscribe for these services can a specific multitude of channels and each one gets the same package. While on the other hand, the tastes of the consumers might change over time. They might desire and have different tastes. Therefore, when they subscribe for the cable networks, most of the channels are worthless for the users. Also there is a drawback that the cable users need to have the television at the time of the show         and this time is specific regardless of the feasibility of the viewers...............................

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