Hulu’s Mike Hopkins

CEO Mike Hopkins tells World Screen about how Hulu will soon be complementing its SVOD service with a bundle of broadcast and cable networks that will allow subscribers to watch shows, sports and news, either live or on demand.

Hulu is an online subscription on-demand service that offers its 12 million subscribers in the U.S. a mix of current and full seasons of popular TV series, films and original series. Hulu benefits from good relationships with its shareholders, NBCUniversal, 21st Century Fox, The Walt Disney Company and Time Warner, which picked up a 10-percent stake this summer.

WS: What are you learning from your subscribers about the kind of programming they want and how they want to watch it?
HOPKINS: This one-to-one internet delivery system will provide us, and others, the ability to tailor the offering for each individual. People want a more personalized experience with their tele­vision. Another important factor will be consumer choice—giving power to the consumer to customize and tailor their experience. This will be happening more broadly in the industry so that people can have their favorite content at their fingertips no matter where they are and no matter what time of day it is. That fundamental consumer control is really what TV and entertainment will look like in the future.

WS: I’ve read that you will be offering live and recorded programs from a streamlined bundle of broadcast and cable channels.
HOPKINS: We plan on launching a new over-the-top service that offers live programming from broadcast and cable brands. It will allow people to watch live events, sports, news—all the great things that are in the current window of content today—along with all the on-demand options that come with those channels. And, of course, we will offer our broad-based subscription on-demand offering. The way we look at it is, no matter which of these products customers purchase from Hulu, the experience ought to be personalized and tailored to their tastes and needs. That will be the case whether someone is buying our subscription on-demand offering, or our live channels offering—or both, and that’s exciting.

WS: Will you target customers who don’t have a cable subscription?
HOPKINS: We’re definitely targeting young consumers who have either decided not to opt into a pay-TV subscription or have opted out—the “cord-nevers” of the world. We’re aiming to provide this “always connected” generation with a subscription service that has all the best content at an affordable price, and make sure that the experience is great and tailored to them.

WS: How does the viewing break down between the two services you provide, the one with limited ads and the one with no ads, and are you seeing one service grow faster than the other?
HOPKINS: When we were looking to make that new package available, what we call our No Commercials plan, we did some research. We found that consumers broke into two camps—they were either “ad acceptors” or “ad avoiders”—and the ad avoiders were clearly not interested in the [regular] Hulu subscription [with commercials] because there were so many other commercial-free options out there. So we built the No Commercials service for them and we definitely have attracted a good number of subscribers that just weren’t interested in Hulu before. What’s interesting is the research we did showed that the vast majority of our customers would continue with the limited commercials plan and that most new subscribers would choose the limited commercials plan. And that’s been the case. The lower-price plan of $8 a month with limited ads has proven to be a really valuable service for people. So the vast majority of them are choosing that plan.

WS: Is Hulu experimenting with interactive ads, and working with advertisers to come up with different ways to provide advertising messages?
HOPKINS: Yes, we’re very focused on the ad business and providing consumers and advertisers with new ways to connect. We’re putting a lot of energy into interactive rich-media experiences. What’s interesting is that almost from the beginning, Hulu offered these kinds of experiences when it was a free PC-based website. We have long offered advertisers what we call our ad selector, which allows a brand to provide multiple creatives to consumers and let them choose which one of them they’d like to watch. We’ve done that sort of thing for a long time, so what we’ve focused on recently is porting those kinds of experiences onto all of the devices, from mobile to the living room. So we’re working with a lot of different partners and we’re building a lot of things ourselves to give consumers more choice around their ads and give advertisers a richer way to interact with consumers.

WS: You’ve been making considerable investments in original programming.
HOPKINS: We’re excited about where we are with original productions. Of course, it takes time to build that brand and create shows and get them onto the platform. We’re at the end of what I would call our first season of originals. Last fall we launched three comedies: The Mindy Project, Casual and Difficult People. So far this year we’ve brought all three back. We also launched 11.22.63 and The Path, our first two dramas, and both of those have done well. So we’re almost a year in now to making what I consider to be our higher-profile, impactful original programming. This fall we’re launching Shut Eye and Chance, which stars Hugh Laurie, and we’re excited about both. Next year we’ll have The Handmaid’s Tale, starring Elisabeth Moss, as well as Harlots, which stars Samantha Morton and Jessica Brown Findlay. In addition, we’ve recently launched the Hulu Limelight Documentary series. Our first two will launch next year.

Originals are critical for our business. Customers expect a service like ours to have compelling, high-quality original programming, and we’re on track to achieve that.

WS: Do acquisitions continue to be important?
HOPKINS: We are heavily investing in acquired programming, across a variety of genres of TV shows and films. We’ve invested a lot in kids’ programming; we purchased a lot of content in that area over the last year and a half. Most recently we announced a deal with Disney for several of their bigger kids’ titles. We also announced an exclusive deal for Curious George a few months ago. On top of that, we carry a lot of Nickelodeon’s top shows, and have an output deal with Cartoon Network. We’re building a really strong offering and that’s an area of focus for us. We’ve also enhanced our film catalog quite a bit over the last year. And we continue to be aggressive in buying popular and critically acclaimed scripted series, like Homeland from Twentieth Century Fox Television Distribution.

WS: Why was the Seinfeld deal important? You paid a good amount of money for a classic show. What message did that send to rights holders and your customers?
HOPKINS: There aren’t very many truly iconic properties like Seinfeld, so when that became available we jumped at the chance to be its exclusive on-demand home. We saw it as a strong centerpiece for our comedy brand and for the huge audience that still is there for Seinfeld. The series has had remarkable staying power over the years. We felt it was a great deal for the price and we have it for a good long time.

WS: What are the biggest challenges and opportunities facing SVOD services in general?
HOPKINS: What’s happened over the last two or three years is competition has increased. If you go back three or four years ago, there weren’t that many subscription on-demand services. There was us, Netflix, Amazon. Now, we’re in a very crowded environment, with the premium networks all going direct-to-consumer and with all of the niche SVOD services that have launched across almost every genre of programming. All of us are facing an incredible amount of competition. That means that you have to get better at what you do. You have to have better programming. When I sit here and say we have to have a great personalized service, we actually have to do that. You have to make the service invaluable in the lives of consumers. Over time, those of us who can deliver that are going to be successful and those who can’t will have a harder and harder time.

WS: Is the personalized service one of the centerpieces of future growth?
HOPKINS: The only way to exist moving forward is to be really good at making sure that customers have quick access to the content they may want to watch at that particular time. You can’t just throw it all out there and let people hunt and peck through a website or an application on TV. They’ll lose patience, and then they’ll be gone and they won’t be subscribers anymore. The stakes [are high] in this business. Those that can be incredibly good will have an advantage. That’s where we’re putting an awful lot of energy and focus. Because you want to make sure that people are having a great experience with the service and finding the great content that we have. There’s never a more disappointing moment than when a customer decides not to continue as a subscriber because they don’t think you have the piece of content that you actually have. If that happens, we’ve failed. So that’s why we’re so focused on it.