Photographs by Chuck Salter
"The industry has gone through more change in the past five years than it has in the previous 50," Zucker tells me. Despite the magnate-in-the-sky setting for our discussion, he means it. And Hulu grew out of that realization.
In December 2005, NBC aired the Saturday Night Live short "Lazy Sunday," featuring Andy Samberg and Chris Parnell as a couple of deadly serious rappers extolling The Chronicles of Narnia, cupcakes, and Red Vines candy ("crazy delicious!"). It quickly went viral on the Web, where millions of people caught it on YouTube. But NBC didn't earn a dime. Along with TiVo, the illegal Web videos were a wake-up call about just how powerfully digital technology could disrupt the TV business. Then, in late 2006, Google bought YouTube for an astounding $1.65 billion. "It seemed crazy to us," Zucker says. "That value was built principally on the back of our content."
Instead of suing YouTube for $1 billion, the way Viacom did, NBC and Fox founded NewCo to compete with it. Initially, they stuck to the corporate playbook, assigning teams from various departments at both networks to strategize. A few months in, more than 100 staffers met at the W Hotel in midtown Manhattan. It did not go well. What Mike Lang, a News Corp. executive vice president and NewCo board member, saw was a pileup of competing visions designed to protect existing turf. We're dead, he thought to himself. The blogosphere came to the same conclusion, referring to the project as "ClownCo." Soon after, the networks secured venture capital from entertainment veteran Providence Equity "to give some validation to this crazy idea," says Zucker.
Kilar was brought in to provide a single vision and to do things in a different way. He pushed for stock for employees, like any other startup. He told his new bosses that he wanted to create a technology company like Amazon, not a traditional entertainment company. Of course, he had initially turned the job down. "We were a little concerned," admits Zucker. "Was this guy flaky?"
Fox and NBC had agreed that they wanted an outsider not constrained by the conventional wisdom in TV, and Kilar wasted no time showing them just what that could mean. NewCo had some 45 consultants and network staffers when he arrived; he let go all but a couple of the people and rejected most of what they'd set up, with the exception of a distribution network and some data facilities. "There was a bit of 'What does he know that we don't know?' " acknowledges Lang.
To replace the original NewCo team, Kilar told the networks he wanted to acquire a startup in China. Accompanied by a pair of chaperones from NBC and Fox, Kilar scooted off to Beijing before his first day in Santa Monica and introduced them to 28-year-old Feng, a basketball and poker buddy he'd known in Seattle. The two had never worked together, but Kilar knew Feng had been a brainy researcher at Microsoft with an entrepreneurial bent. Kilar was determined to develop proprietary technology and, after studying Feng's year-old online-video startup, decided that he was the one to do it.
One of the network escorts argued that Feng was too young and inexperienced for the high-stakes project. But the other network exec told Kilar, "It's your company." Feng became Hulu's CTO, although he admitted to Kilar that he wasn't sure exactly what a CTO did. At one point, Lang contacted NBC and said what everyone must have been thinking: "What have we gotten ourselves into?"
Kilar preferred to build the site with a handful of people he knew -- "the Ocean's Eleven approach," he called it. He hired Amazon and Microsoft veterans and former classmates from Harvard Business School, folks who were willing to work long hours scribbling ideas on whiteboards and writing software code in a push to get the site up in less than 90 days.
Soon, Kilar was lobbying to release an invitation-only beta site to allow continuous iteration before the official launch. It's a common Web practice, but on TV, it's akin to filming an early draft of the script. "Jason pushed us on the beta," says Lang. "He said, 'This won't work perfectly,' but we trusted the approach." Kilar's manner was consistently politic -- and the board realized that rejecting his ideas would leave them with few options. When Kilar proposed an odd-sounding new name, Zucker's first reaction was: "What the hell does 'hulu' mean?" (It's Chinese for "holder of precious things.") But he went along with it.
And so Hulu was born.
Digeratti: Jason Kilar, just saw ur interview on Charlie Rose where u say u search twitter about 20 times a day for hulu ... Whats up? U listening?
-- posted on Twitter in August
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Recent Comments | 12 Total
October 15, 2009 at 12:56pm by Jeff Davidson
Why is anyone surprised that putting Hollywood produced content on the Internet would draw viewers like flies to honey? The real question is what happens to Hulu after TV Everywhere?
October 18, 2009 at 4:21pm by Ruth Schwartz
I am disarmed by these lines in the first page;
"Imagine that The New York Times and The Wall Street Journal had gotten together and created Google News. Or that Sony Music and Warner Music Group had introduced iTunes. That's Hulu, a daring attempt by would-be victims of the digital revolution, NBC Universal and News Corp., the parent company of Fox, to control their content -- and their fates."
Someone save me. Its been said out loud! After 25 years in the music industry I can safely say: What was wrong with Sony and WEA that they didn't do this 10 years ago and handed their fate into the hands of the computer industry? Even when I sat at the independent content provider intro to itunes in 1996 in Cupertino, I wondered why they allowed this to happen. I also was thrilled that someone- anyone - picked up the gauntlet and moved the industry out of inertia even if for a short time. Apple didn't solve the music industries problems but they did pull us along with them. And now, Hulu with their benefactors at NBC and Fox are an example of facing change head on. Shame on the music industry. You still embarrass me, years after my exit. Way to go Hulu.
In this same copy of Fast Company, The Heath Brothers write an article on looking out of your box to solve problems. It is the same thought as the Hulu article- thanks again for saying it out loud:
"The biggest barrier to the idea hunt, in fact, may be you. It may never occur to you to start searching because we all commonly keep our thinking penned up within our company or industry."
Ruth Schwartz
http://highperformanceadvocates.com/audio-video-and-book-recommendations...
Ps: Hulu are positioned to be broadcast tastemakers long after TV Everywhere.
October 19, 2009 at 3:25pm by John Mcknightl
Hulu isn't accessible in any part of the world, that's the downfall of it. Despite that matter, I've heard that it really gives high quality of service to their viewers.
John Mcknight
October 19, 2009 at 6:12pm by Kevin Lenard
This is a pivotal “tipping point” article for broadcast TV’s future, but also for both “legacy media” people and the entire “ATL dinosaur ad agency industry.” Interestingly, so many of the fundamental, step-change answers, the consumer insights Kilar ‘listens for’ so carefully and constantly on Twitter, have already been uncovered, but remain untouched by the industry, in part because they're anathema to our status quo, "Push Marketing" model.
Some telling quotes from the article:
‘Kilar: “Users deserve to have whatever they want to watch," he says, "whenever they want to watch it, however they want to watch it."’
‘At a conference in early September, News Corp. chief operating officer Chase Carey warned, "Ad-supported only is going to be a tough place in a fractured world....You want a mix of pay and free."’
And users will, through TV Everywhere, Boxie and Hulu competitors, get “whatever they want whenever” very soon (Apple’s “iTablet” plus all their competitors and “always on Super 3G wireless Internet” combined with Bluetooth 3-D glasses will soon give it to them wherever they are). The key point that is not being addressed by Hulu due, in large part, to the ongoing power of the legacy-dinosaurs is “The Death of Frequency (Repetition)” -- NO ONE wants to watch a 30 second video ad more than once or twice. Really not. Lee Clow and Apple are one of the few marketing teams who get this at the moment. ( http://advertisingbusinessmodelredefined.blogspot.com/2009/01/DEATH-OF-F... )
‘For the June launch....Microsoft ran a Bing-a-thon....”This gave us the right audience, the ability to educate and entertain, and the opportunity for them to try out the product and then market our product for us....No other ad platform lets you do all that."’
The latter should have read: “No other MASS MEDIA ad platform lets you do all that.” The oldest marketing medium in human history does all of that and much more: Buyers at a market stall speaking with a seller about her/his product. Snake oil salesmen at a travelling fair. Door-to-door Fuller Brushmen. Blue-haired sampling ladies at your supermarket. Every experiential marketing effort being leveraged today. According to Fast Company panel of Marketing gurus, we’ve entered the age of “One-On-One Marketing,” face-to-face, buyer to seller.
In the mid-term, this is where the marketing industry’s focus will shift, to Brand Experience/Engagement as the starting point for evert successful marketing campaign. ( http://advertisingbusinessmodelredefined.blogspot.com/2009/03/NEW-ATL.ht... )
Just a thought.
October 19, 2009 at 6:54pm by Kevin Lenard
Apparently my links above were too long for the system. Should you be interested:
"The Death of Frequency": http://preview.tinyurl.com/yzast9p
"The New ATL": http://preview.tinyurl.com/yf47efx
October 20, 2009 at 12:26am by Varun Arora
Excellent story on a service that those of us outside of the US are hungry for (lust after? are desperate for? take your pick, they're all correct!)
@John: their unavailability doesn't make it their "downfall" - it just means that they can't [yet] tap overseas markets and overseas advertisers. It takes a LOT of effort to get the overseas advertisers on board and overseas viewers (like me!) are otherwise just bandwidth and resource hoggers who contribute nothing to hulu's bottomline, so this approach is understandable, regardless of whether Hulu has the rights to show their programming to folks outside of the United States (and I suspect they don't).
That said, I'm a HUGE fan of ad-supported PLUS paid-subscription business models (which is also where we're headed at HomeCamera, and where I think you're going to see many top-notch publications by 2013). I'd be delighted to be a PAYING overseas subscriber, cheerfully forking over $9.95 per month or $99.95 per year, while -still- seeing ads.
Anyone from Hulu reading this? Get in touch! Now! Pretty please?
- Varun Arora
CEO, HomeCamera
www.homecamera.com
November 5, 2009 at 3:12am by vivian cu
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November 12, 2009 at 12:07pm by Russell Warner
Hulu is one more step of intermediation in a disintermediating world, i.e. the middle-man in every industry is going bye-bye. If you want to see the future of TV, look no further than southparkstudios.com. Hulu will direct you to it and the producers of South Park keep the ad revenue. Who needs Hulu? I'm as much of a fan of Hulu as anyone, but thinking that it's a long-term strategy is short-sighted.
November 17, 2009 at 6:50pm by Mary McKnight
I love Hulu - I am hopeful that film companies will publish their old media libraries and start generating online dollars from them on demand. I think it would help them fight piracy which we all know the MPAA is dead set on doing. On the flip side of that I am most hopeful that the recording industry will find a music solution similar to this and Spotify that generate revenues from ads yet offer a free model to consumers thereby reducing the need for pirating songs and videos.
November 23, 2009 at 8:37pm by Blu-ray video
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November 23, 2009 at 8:37pm by Blu-ray video
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November 23, 2009 at 8:40pm by Blu-ray video
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