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Q3

October 5th, 2011 by Jason Kilar CEO

A few days ago, we closed a big third quarter for Hulu. In addition to our traditional quarterly recap, we’d also like to take the opportunity to announce a material content license agreement with Univision.

- CONTENT. The content offerings in Hulu and Hulu Plus have seen dramatic growth over the past 90 days and on a year-over-year basis, with videos offered in Hulu growing 39% year-over-year and videos offered in Hulu Plus growing 106% year-over-year. Most notably from the past 90 days, we have entered into a significant licensing agreement with Univision that will bring hundreds of hours of top-rated Spanish-language telenovelas, variety shows, comedies, and reality series from the Univision family of networks. Current-season content and content from Univision’s vast library will be coming to Hulu and Hulu Plus over the next 90 days.

Here are just some of the reasons why we are so excited about this agreement:

  • • The Hispanic population in the US is already over 50 million and growing much faster than the balance of the US population. The Hispanic community accounted for fully 50% of the population growth in the US this past decade. The Hispanic population in the US is already larger than the populations of, to name a few countries, Canada, South Korea, or even Spain.
  • • Univision is the undisputed leader in premium content for the Hispanic community in America. Among the Hispanic community, 24 of the top 25 most-watched series during TV’s fall premiere week were Univision shows.
  • • Univision has done an incredible job creating content that appeals to the Hispanic digital generation; year-to-date, Univision is the country’s third most-watched network among all Americans 18-34 years old. Univision’s content clearly appeals to the generation that most intensely craves access to content on their terms (anytime, anywhere). This is a great fit for Hulu and our product vision.
  • • Prior to Hulu’s agreement with Univision, the Hispanic community in America has not had a digital distribution service that served top-tier long-form content of this magnitude across Internet-connected devices, on demand. We are thrilled to be the first service to do so.

Further details on this important agreement can be found here.

The Univision agreement comes on the heels of a successful summer of exclusive programming on Hulu. All three of our summer exclusives — “Misfits,” “The Booth At the End,” and “Whites” — hit No. 1 on our Most Popular ranking at various points throughout the summer. We will continue to invest in bringing our users exclusive, defining, top-tier programming.

In the past 90 days, we also launched our first foray into original long-form programming with “A Day in the Life,” a six-episode, half-hour documentary series by acclaimed filmmaker Morgan Spurlock (“Super Size Me,” “The Greatest Movie Ever Sold,” “30 Days”). With “A Day in the Life,” we kicked off a new Hulu initiative designed to creatively and financially support the work of independent storytellers. Hulu is always looking to invest in exclusive, high-quality content, and we are proud that “A Day in the Life” ranked as the most popular series on Hulu numerous times throughout the summer. “A Day in the Life” is a great example of the kind of content we will be investing in as part of our original programming initiative.

- INTERNATIONAL. On Sept. 1, we launched a Hulu subscription service in Japan. This was a first, but important, step to advance our aspiration to serve customers all over the world. While it is still early days for this service, we are encouraged by the response we have seen from both users and content owners. As we have done with our services in the US market, we have continued to add to the roster of content we offer in Japan, most recently by adding films from Miramax’s highly regarded library.

- HULU PLUS. The Hulu Plus subscription service exceeded 1 million paid subscribers during the summer that just passed. Based on our research, we believe this represents the fastest ramp ever to 1 million paid subscribers among any video subscription service in the US. Over the past 90 days, we have added significantly to our device footprint, including:

  • • 12 additional Android mobile phones and two Android tablets
  • • Select Panasonic TVs and Blu-ray players
  • • Select LG LCD TVs, Blu-ray players, and set-top boxes
  • • Roku 2 set-top boxes
  • • Western Digital set-top boxes

In total, Hulu Plus is now accessible from more than 120M devices in market, with more to come.

Though we only exited our invite-only period for Hulu Plus less than a year ago and our Japan launch was just on Sept 1, we anticipate our subscription services to account for more than half of Hulu’s overall revenues within the next 12 months (our subscription services generate revenue from both subscription fees and, in the US, a modest amount of advertising).

- HULU’S ADVERTISING SERVICE. While not technically a Q3 milestone since we launched this product earlier this week (Oct. 3), I would be remiss if I did not mention our most recent innovation, Hulu Ad Swap. Hulu Ad Swap puts complete control in the hands of the user, who can now swap out of an ad they are watching for one they decide is more relevant. Advertisers, users, and content owners all win when the user is empowered in this manner. Our research has shown that this feature is driving 93% higher unaided brand recall and 35% higher purchase intent. With these highly unusual early results, it would be hard to overstate the impact we believe this feature will have on video advertising. Hulu Ad Swap exemplifies the philosophical difference between selling ads and inventing better ways to serve users and advertisers.

- SOCIAL. In Q3, we made TV much more social through two new integrations with Facebook. In July, we launched Facebook Connect on Hulu and, in September, we launched the Hulu on Facebook app. Through Facebook Connect, Hulu and Hulu Plus users can easily log on to Hulu using their Facebook account, comment on a moment in time from shows or movies on Hulu, and interact with their Facebook friends. Separately, over at Facebook.com, the Hulu on Facebook app is a fully integrated experience that enables the user to watch Hulu videos without leaving Facebook. We are very excited to empower and connect users via these two Hulu product innovations.

It has been a big third quarter for Hulu, and a big year thus far. We are extremely thankful to our customers for their belief in Hulu and their support of our relentless pursuit of better ways. On behalf of the entire Hulu team, thank you for allowing us to serve you.

Jason

P.S. Some photos from the past 90 days at Hulu HQ (and beyond)

Hulu team members at the Hulu Japan launch event in Tokyo, Japan
 

Principal Software Engineer Ilya Haykinson presiding over a regular installment of our Hulu Hack Days
 

A Hulu Hack Days product idea from this past quarter: Build A Life-Size Angry Birds Game
 

And, well, there it is

Last comment: about 12 hours ago 13 Comments
  • Courtney says:

    I am very happy to see spanish programming being added. We are a bilingual family and would love to cut the cord, but the lack of spanish programing (on demand) has been a real issue. I hope to see more networks added soon. Thank you.

  • Hi Jason,

    As I mentioned to a previous comment, I too am waiting for support on Samsung devices, but they are definitely on our list, and we are aiming to provide an app for them soon.

    Thanks,
    Brad
    Hulu Support

  • Hi Shaun,

    I hear ya. As a Samsung user myself, I too am waiting for support on their devices. The good news is, Samsung devices are definitely on our radar, and we hope to bring an app to them soon.

    Thanks,
    Brad
    Hulu Support

  • Jason says:

    No Samsung devices, phone or tablet, in the United States, but it looks like they’re available in Japan. Is this something that’s going to change? I have a Samsung Charge, and a Galaxy Tab 10.1, and am weighing my long-standing subscription to Hulu Plus on it at this point, and no news is still news to me.

  • Shaun says:

    If you want Q4 to be even more profitable then consider this obvious little business strategy – instead of putting Hulu Plus on a bunch of underselling android devices (HTC, Motorola, etc.) try putting it on the largest selling mobile android platform – Samsung. I, and many more people, want Hulu Plus on our mobile Samsung devices and we’re actually the largest group outside of mobile Apple consumers. So please put your profitability before whatever conveniences are currently stalling you all and put Hulu Plus on android’s Samsung devices.

  • Ben says:

    I would gladly renew my Hulu plus subscription if the ridiculous 8/”Until the fall” day delay went away. I had Hulu Plus until you started pulling that crap for shows from the Syfy channel. It needs to be available the day after airing or no deal.

  • Christine,

    At this time, English subtitles won’t be there. That said, I think that’s a great idea and I’ll make sure the appropriate people see your feedback!

    Thanks!

  • Kevin M. says:

    Should we not all try to encourage the Hispanic population in the US to speak and understand English ? That being said, I am a paying member of Hulu plus and to be honest, I am very disappointed in your service. 90% of your movies are not all that good. And now to read that you are adding all of this Hispanic entertainment, well, that really does nothing for my family and myself. I might give it a little while longer, however, if things don’t change soon, I may have to end my subscription.

  • Tyson says:

    When will you remove the webonly restriction so I can watch content I’m paying you for on the device of my choosing? (Xbox 360, phone?)

  • Christine says:

    Is the Univision content going to have English subttiles? Because then it’d be a huge boon for Hulu users!

  • VERY HAPPY TO HEAR THE GREAT NEWS ABOUT UNIVISION JOINING HULU.COM FAMILY,KEEP THE GREAT WORK HULU TEAM :)

  • Mike Sklens says:

    I know you probably can’t say, but do you have any plans to add support for AppleTV? I use the PS3 app right now but that thing is a power-hungry monster, and the app is incredibly laggy. The AppleTV is much more power-friendly and I imagine it would have a nice slick experience to match the other services on it.

  • Atnevon says:

    Spanish language content is important, certainly; however, I have to assume that the majority of your core audience, especially here in the U.S. (where you started) is English speaking. To be honest, if it wasn’t for The Daily Show, I wouldn’t be paying for my subscription to your service, and even at that, I’m very tempted to just watch it on my computer these days and save myself some money each month. What can you guys do about getting all of the content you have on your site out there for streaming to TVs? I’d almost rather that you just completely cut out every show from your site that you can’t get on Hulu Plus so as to avoid confusion when I’m trying to figure out how to watch a show.

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