Hulu, fresh off becoming the second-most-used video web site, has decided to bring in social networking features to help build user loyalty and at the same time collect audience data for advertisers.
As its content war with CBS’s TV.com continues, Hulu, the joint venture of NBC Universal and News Corp’s Fox, is taking a page out of the TV.com playbook by incorporating social features like profiles, updates and the ability to share videos with other users.
Hulu has launched what it calls Hulu Friends, which allows users to synch up friends from Facebook, MySpace and e-mail contacts, as well as other Hulu users. Users can interact with these friends in a variety of ways, including a scorecard for tracking friend activity, and making the service feel like a Facebook that offers the latest episodes of TV shows.
The new features are set out first to encourage users to connect with each other and increase the desire to visit Hulu again. TV.com already has in place some similar features, as well as related news, and was consistently seeing higher viewership numbers than Hulu last year and at the beginning of this year.
One added bonus, which Hulu seems to be trying to downplay, is that increased viewership by users that have profiles will give Hulu a lot of audience data it can use to attract higher-paying advertisers. Hulu Chief Executive Jason Kilar told The Wall Street Journal that ad revenues were a focus but would not say if Hulu is a profitable business.
According to Nielsen, Hulu has hit the number 2 spot only about a year after becoming active. This is an impressive jump and is mostly due to a 33% surge in traffic fueled by a Super Bowl ad, which was Hulu’s first advertisement to the general public.
The top 5 video Web sites by usage:
Hulu saw its unique users increase about 31% to 9.5 million, according to Nielsen, though there is some disagreement here. The numbers from comScore are almost three times that, and Hulu is obviously siding with comScore on this one.
Cablecos are paying billions each year to carry and show content, and the combination of a shrinking economy and the availability of TV content online have them rightfully scared. People abandoning subscriptions for online consumption is a real cause for concern, despite what any research may tell them.
Kilar’s comments to The Wall Street Journal seem to indicate that Hulu aims its business at providing entertainment to the computer, not acting as a TV replacement.
This could be one reason Hulu and Boxee have been sparring, because Boxee is good at getting content from the Web like Hulu’s onto the TV set.
Social networking features will help emphasize this business approach and ease a lot of the tension about Hulu’s ability to undermine traditional TV networks. A shift to social functionality makes the service as much a place to check updates and watch clips as it is to discuss what has already been watched on TV. Users will be able to discuss episodes that have aired and use Hulu’s provided video as examples or backup for their point.
Another thing that makes Hulu feel less like a TV with a keyboard is the non-TV-related content. This includes some movies, movie previews and a recent increase in clips about baking or improving your golf game. These come from professional studios but are put in forms and sizes that would be hard to consume on traditional TV – Hulu in no way looks like it’ll be adding user-generated content like YouTube.
Hulu’s exclusive distribution deals with NBCU and News Corp. will expire soon, which will put Hulu out into the fray on equal footing with a lot of sites. Expect improvements and new features from every company and site involved as they count down until the content floodgates are opened.