This article is based on research conducted for a presentation given by Northwestern Law students in Professor Clint Francis’s Intellectual Capital Management course during the Summer Semester of 2013
Authors: Elena Endrukaite, email@example.com, Northwestern Law J.D. 2015, Stella Brown, firstname.lastname@example.org, Northwestern Law J.D. 2014, Eric Puno, R-Puno2014@nlaw.northwestern.edu, Northwestern Law J.D. 2015, Daniel Radke, D-Radke2015@nlaw.northwestern.edu, Northwestern Law J.D. 2015
In 2007 Jason Kilar saw an advantage to providing the standard methods of TV content delivery, while also giving customers complete control to choose what they wanted to watch among available content and when they wanted to watch it. His brainchild—Hulu—offered a centralized, all-in-one service without the cumbersome and expensive additional hardware and software, while generating no compatibility issues with current technologies.
Yet, six years later, in 2013, Jason Kilar, Hulu’s CEO, Eric Feng, the Chief Technology Officer, the Vice President for Hulu International, Johanness Larcher resigned; Andy Forssell was appointed as the current CEO.
Hulu’s Intellectual Capital
Hulu was built to incorporate any content, and to enable user access anytime, anywhere and through any device. Because the technology industry is inherently non-linear, any new developments require strong flexibility to accommodate any future rapid change. Such flexibility of use makes Hulu’s platform particularly interesting.
Few can argue that the lowercase Futura font and the color green are not ingrained in the minds of customers. The sleek appearance of Hulu’s interface suggests high quality and is iconic of Hulu’s devotion to intuitive elegance.
By starting the company from the ground up, Hulu has accumulated a body of knowledge in all aspects of the business. Hulu has developed skills from a strong belief in responding to user feedback.
Hulu has nine patents protecting the operating methods of Hulu’s online video platform: the collection of data, implementation of advertisements, and targeting of video content. Noticeably absent are any patents protecting physical inventions.
Hulu’s trade secrets stem from manipulating the data collected on user viewing habits, advertisement preferences, and demographic information. Hulu has leveraged this information to better target its content and advertising.
In addition, Hulu has seven copyrights for the computer code associated with Hulu’s online video platform.
Management of Hulu’s Intellectual Capital
Knowing how to attract the right audience should enable Hulu to accomplish its new goal—providing better shows and marketing that’s a lot more sophisticated. Hulu plans to do so using a technique that merges the idea of content acquisition using the traditional network channels and content production for Hulu’s exclusive use.
While Hulu is a distributor at heart, it now owns its own content for exclusivity. In late 2013, the company planned to roll out ten more shows, including “The Awesomes” (August 1), “Quick Draw” (August 5), “Behind the Mask” (October 29), “Mother Up!” (November 6) and “The Wrong Mans” (November 11).
Unlike the exclusive content that seems to be profitable, Hulu’s international reach encountered difficulties. With distribution of Hulu content to Japan being unsuccessful, acquisition of the international content for distribution across the US is yet to yield any results. The U.S. market in particular, which has diverse ethnic populations, could help Hulu capture greater audiences in the long term.
The Future of Hulu
Regardless of the success in Japan, it is especially surprising that Hulu has not gone deeper into international business. Based on the numbers alone, it may be better for Hulu to expand its market into foreign territories. Such a move, although risky, could be profitable in the long term as populations continue to grow. If Hulu could penetrate even just one percent of the Internet users in Asia, it would almost reach the current number of Hulu users in the U.S. today. Moreover, if more than three quarters of consumers of all ages in major geographies around the world are now watching video content over the Internet via a PC or TV, this move is more likely than not to yield significant revenue.
Lastly, online gaming is a largely untapped potential source of traffic to Hulu. If Hulu could be used as a platform or a host for online gamers, there could be a tremendous increase in traffic. Additionally, gamers will linger on the website longer allowing increased targeting by advertisements. These moves would be logical for Hulu as it has already invested in Hulu-game console integration.
With so many options and opportunities for Hulu to become an even stronger, more popular, and financially beneficial service, Forssell must think of a plot not to destroy the world, but to make Hulu an out-of-world experience that everyone will flock to.