Hulu giving competition run for their money in streaming video businessThe masterminds behind increasing Hulu’s paid subscribers should give themselves a pat on the back. Reaching their goal of 1 million users 3 months ahead of the predicted target date says a lot about Hulu’s marketing and business strategy.

After taking a look at Hulu’s strategy and successes I wanted to point out a few aspects of their strategy that we at SnapHawk believe exemplify an effective marketing strategy aimed at targeting key audiences and listening to customers.

Americans watch more video the older they get so one challenge for Hulu was to target students (check out this study of video watching habits). Hulu certainly got it right. By offering a free month long trial to anyone with a .edu email address Hulu made is easy for college kids to see of the benefits of the modestly priced ($7.99/month) Hulu Plus subscription service before committing to actually paying for the service. Hulu also offered a week long free trial to everyone else interested in the service to convert any skeptics out there.


The Product

An important factor to consider is that Hulu had a great product to offer from the start. By offering free trials more and more people were able to see this. If Hulu had offered a free trial before they were sure they had something great to present to customers the strategy would not have been as successful.


Targeting Consumers

The free trial for students started over the summer when students have more time to watch TV. The service was appealing to students who missed their favorite shows over the academic year or who wanted to catch up on a new show before the next season started. The price of a Hulu Plus subscription, which doesn’t require any sort of commitment, is much more appealing to students than paying for shows by episode or by season on iTunes or Amazon. Additionally, downloading shows to your iTunes library is one sure fire way to fill up your computer’s hard drive (something I learned from experience).

Hulu listened to their customers. In particular they found a way to appeal to students, who are more prone to downloading video illegally because of the cost. $8 a month is much more manageable for most students than the price of videos on Amazon.com or iTunes.


Successful Pricing Strategy

hulu, netflix, amazon.com, itunes, streaming video, internetThe pricing of Hulu Plus is something competitors are sure to envy. Amazon Prime costs less over the course of a year (by only about $1.50 a month or $18 a year) but doesn’t allow you to pay monthly. Hulu Plus offers a great option to those of us who only have time to watch TV during some months but not others. Purchasing an Amazon Prime account does offer access to other services such as free shipping on products but because Hulu is purely a video site there is not much they can do in this area except continue to improve their product and let customers make a decision of which site to use.

This leads me to one of the most important factors that gives Hulu an edge in the streaming video market. That factor is their partnership with NBC Universal, News Corp. and Disney. These partnerships allow Hulu to stream many shows the day after new episodes air and whole seasons of shows are available on Hulu Plus. Without an Amazon Prime subscription one season (24 episodes) on Amazon.com would cost close to $30 – one episode costs $1.99, or $2.99 for the HD version. With Hulu Plus you pay $8 a month and the amount of shows you watch is unlimited (you can watch ten seasons of various shows for just $8 on Hulu Plus if you so choose).


Expanding Through Social Media

One place Hulu was initially lacking was in their social connectivity but now you can watch Hulu videos directly on Facebook with the launch of the new Hulu Facebook app. 

Facebook Hulu application streaming video, social media

The only major disadvantage Hulu currently faces is the lack of current popular movies – Netflix has them beat in this category. However, Hulu’s CEO announced they are set to invest $357 million in content very soon (Reuters). This investment combined with the fact that they reached 1 million subscribers three months earlier than expected makes it seem as though Hulu may soon catch up to Netflix.