Starting this week, we will be writing a weekly column for the Wall Street Journal entitled Click. Below is our first piece.
In “Alec in Huluwood,” Hulu.com’s first-ever Super Bowl TV spot, Alec Baldwin describes how the streaming video site, a joint venture between NBC Universal and News Corp., will allow television to fully, finally succeed in turning our brains to mush.
It’s debatable, of course, whether online episodes of “Family Guy” and “Colbert” rot our crania more, or faster, than quick-hit clips of dramatic chipmunks and skateboarding cats. But this much is clear: The two kinds of video owe their success to two very different demographic groups of viewers.
When you look at the audience of well-known Web 2.0 properties like YouTube, Facebook, MySpace or Twitter, their rapid adoption was fueled by 18- to 24-year-olds. At YouTube’s launch in late 2005, more than 50% of its site visitors were 18- to 24-year-olds.
This was not the case with Hulu.com. When the company launched its public site last March, the largest age group visiting the site were those Internet visitors over 55 years old, accounting for 47% of all site visits, while traditionally younger early adopters accounted for only 17% of traffic.
It later became clear that what first appeared to be a data anomaly was the result of Hulu.com’s very Web 1.0 launch strategy, which used articles in the New York Times and other newspapers to attract viewers. As a result, after its release in October 2007, more than 20% of Hulu’s traffic came from newspaper Web sites. The largest age demographic for visitors to print news Web sites is older Internet users over the age of 55.
By comparison, when YouTube launched in late 2005, traffic from print news Web sites accounted for less than 0.5% of its traffic. One of YouTube’s largest sources of traffic at launch was from Web-based email services, at 19%, as its early adopters forwarded their favorite clips to their network of friends.
Of course, it wasn’t just the launch strategy that attracted older viewers to Hulu. The content on Hulu — primarily network television shows from NBC and Fox — was already in the sweet spot of the so-called Greatest Generation.
Still, in its first months Hulu.com experienced slow ramp, hovering around the No. 20 position of online video sites during the first weeks of public availability in March 2008. In the last six months Hulu.com’s visits have accelerated, reaching its high point in visits immediately following Sunday’s commercial. On Monday, Feb. 2, it garnered 2.5% of all visits to the category, claiming the No. 4 position behind YouTube, Google Video and MySpace Video, according to Hitwise.
In its current position, Hulu is still playing catch up to YouTube, which captures nearly 10 times the amount of traffic. However, search term data reveals that Hulu may have an advantage over YouTube. Of the top 20 search terms entered into YouTube’s site search, 15 were seeking broadcast and cable television content in the form of music videos, movie trailers and episodes of “Family Guy,” a Fox animated sitcom, content that Hulu has license to stream. YouTube often carries similar clips, but without a content license they are subject to removal based on the content owner’s request.
Nearing the one-year anniversary of its public launch, Hulu’s age demographics have begun to normalize with 25- to 34-year-olds taking over as the largest age group, with 29.2% of all visits signaling that Hulu may be entering its mass adoption phase. For the month of January 2009, on a percentage basis, Hulu had a stronger base of 25- to 44-year-olds, when compared to YouTube, while 18- to 24-year-old YouTube users outnumbered Hulu’s by two to one.
If Alec’s assertion on “Huluwood” is true, that Hulu has brought us to the convergence of television and computer, then the future success of online video may have less to do with the 18- to 24-year-old viral network effect and more to do with the power of traditional media players.
Reprinted from the Wall Street Journal.