

Hulu a consumer success but still a small business: Est. $12.5-25mm net revs - fromedome
http://www.alleyinsider.com/2008/7/hulu-a-consumer-success-but-still-a-small-business

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JimEngland
They need to 1) includes ads into small clips (3-5 min) and 2) vary the
advertising on full television episodes. Seeing the same Toyota ad seven times
isn't helpful to the consumer.

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SwellJoe
_Seeing the same Toyota ad seven times isn't helpful to the consumer._

But it's helpful to the marketer. It takes at least that many impressions to
even register.

This is actually why I'm surprised by how little money online advertising
makes. It would be possible for an advertiser to buy several impressions with
the same user--or a series of ads being shown to the same user. Everything
I've ever read about marketing tells me this would be more effective than an
ad shown to five different people only once.

 _They need to 1) includes ads into small clips (3-5 min)_

I recently built an HTPC with Media Center. When I first fired it up, I
browsed to the "watch TV online" thing...clicked on the first popular clip. 30
second ad. 45 second clip. Never again will I browse to that option on my
HTPC. Ever.

Anything less than 5 minutes with an ad is gonna piss me off.

But, I do love Hulu. The quality isn't as good as I'd like for most of the
shows and movies (that HTPC is hooked up to a 46" 1080p TV), and I had to hit
bittorrent to catch up on Battlestar Galactica this season when I missed the
first couple--they only have the last three or four episodes on Hulu and
scifi.com--but I still like being able to catch up on shows at my convenience.

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webwright
12-25 million in revenue is staggeringly good for their age. Private beta in
Oct 07. Launch in March 08. Assuming growth (which I think they have), I'd
call that a pretty amazing success.

~~~
akd
It's a bit different when you're an NBC / News Corp joint venture. The whole
issue of getting your name out there, networking, etc. is not really an issue
-- the CEO makes 10 phone calls and has all his content lined up. Also the
amount of free publicity was massive since NBC and News Corp together control
a number of different media outlets, and other news organizations jumped on
the bandwagon.

~~~
alaskamiller
I have yet seen any reference to Hulu on the networks. In fact, Fox prior to
this month were still telling people to go to fox.com and use the horrible
media player to watch shows on demand.

Having the access to that huge library of content, though, makes it pretty
darn hard for other companies to play in the field.

~~~
j2d2
I'd guess they're still building out the library. Much better to make a huge
splash than be _another youtube_.

~~~
alaskamiller
I'm sure there's lots of legal wrangling involved.

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dominik
I used Hulu to keep track of Battlestar Galatica for the early half of this
past season. Originally, Hulu posted episodes the day after they aired and
didn't include any commercials. However, as the end of the season approached,
Hulu -- without warning or advance notice -- delayed posting episodes until 8
days after they aired. Only after folks complained did they put up a schedule
of airdates.

I also had the chance to watch several movies on Hulu; once again I found the
service started excellent and got progressively worse. Early on, movies
downloaded quickly and had no ads. Towards the end of May, however, Hulu
started interrupting movies with ads in seemingly random places -- not in
natural transition points but right in the middle of an actor's words.
Furthermore, as they apparently hadn't secured advertising yet, these "ads"
were just 15 seconds of static white text on a black screen that read:
"Brought to you by Hulu's advertisers" or some such. I found these pointless
since they didn't even name the advertisers or feature their logos. Disgusted
with these pointless interruptions, I've since swore off Hulu.

In short: They had a good thing going at the start, but have proceeded to muck
it up.

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vaksel
25mm in revenues is small? I mean sure its not Google but its hardly on the
same level as Joe's Corner Store, Mike's Landscaper Services and Paul's Video
Store.

~~~
SwellJoe
_25mm in revenues is small?_

Yep. $12.5-25 million will only support about 100-200 employees. Maybe more,
if they're not high end people (but I suspect Hulu does not have a lot of
positions that don't require some sort of high end expertise--very little call
for consumer sales or tech support in a business like that).

100-200 people is still a pretty small business in modern terms. Google
employs 35,000 (or something like that). Microsoft, Sun, IBM, and Intel
probably dwarf Googles numbers.

~~~
LogicHoleFlaw
I've been struggling with this one myself. My current company will have grown
from 50 people in January '07 to 300+ in January '09. And the larger we get,
the longer it seems to take to get anything done.

I'm very interested in hearing strategies for keeping a company aggressively
small without having to give up the ability to chase increasing revenue.

~~~
SwellJoe
_I'm very interested in hearing strategies for keeping a company aggressively
small without having to give up the ability to chase increasing revenue._

I don't have any real good answers for you there. We're still pretty much a
two man shop, though we've just hired a part-time support and documentation
person (five hours per week--extremely part-time, but enough to free me and
Jamie up a bit from support roles so we can focus on other revenue-generating
tasks).

I may have gone in an abnormal direction by hiring someone really experienced
for the support role, rather than hiring someone really cheap and training
them. He costs more, but we don't have to train him and I've got great
confidence in the support he provides. He's a technology jack of all trades
that happens to fit our business very well, and I believe he'll provide far
more value to our customers than he costs us to keep him working.

We're torn on the "stay small" vs. "go big" question, as well. We know we're
going after huge revenues...we're just trying to figure out how to maximize
those opportunities without bogging down the company with a lot of unnecessary
head count. I think the key is to boil it down to your core business. Our
thinking is: "Why do people pay us?" And the answers are: Powerful software
that gets better all the time, great personal support via our website, less
painful licensing processes than our competitors.

So, those are the things we need to spend money on (plus marketing and
advertising in order to let people know those are the things we provide).
Everything else is not our job--we'll outsource it. In the next week or two
I'm planning to hire a part-time bookkeeper to come in once per week to clean
out my inbox, pay bills, and enter our accounting data into the accounting
system, etc.

But, then again, that still doesn't answer your question, and doesn't solve
the problem--at some point, if you have success, you have to hire more people.
Full time legal, accounting, sales, support, etc. It just happens...but I do
think it's worth fighting a few aspects of that. Hierarchy can be a problem,
and should be fought against pretty strongly...I've seen an organization that
brought in a new CEO, and she looked around at the general messiness and
inefficiency of the organization (a ~60 person non-profit with a few tens of
millions in managed money), and decided that what the company needed was more
C-levels. Last I heard they had seven C-levels. That's less than ten employees
per C-level, for those keeping count at home. I'm pretty confident this did
not improve the efficiency of the organization.

I get the distinct impression from people I know who work at Google that they
have a similar problem. MBAs look at the organization and think, "What this
company needs is a little more management." And they hire more MBA-wielding
managers, who look around the organization and think, "What this company needs
is a little more management." And they hire more MBA-wielding managers, who
look around...

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coglethorpe
How much revenue do they "need?" I know sites cost less and less to operate,
and a small team of developers can do a lot.

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pchristensen
Small for the companies that run it.

