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Case | HBS Case Collection | September 2017 (Revised December 2017)

Hulu: Redefining the Way People Experience TV

by Henry W. McGee and Christine Snively

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Abstract

In May 2017, Hulu CEO Mike Hopkins announced the launch of Hulu Live TV, a new offering that would "change the way people experience TV." The new service would allow consumers to bypass traditional cable and satellite delivery and use the Internet to access live streams of more than 40 popular broadcast and cable networks along with Hulu’s existing suite of on-demand programming. Priced at $39.99 per month, Hulu Live TV offered consumers a tremendous savings over traditional cable program packages and allowed subscribers to watch programs on Internet-connected televisions and a wide range of mobile devices. Hopkins also announced that the company would make a major push into the production of exclusive, original programming, one of the industry's most competitive areas. Hulu's new initiatives occurred during a major transformation in the TV industry as the Internet had revolutionized every aspect of the business. Industry observers wondered if Hulu could successfully compete against the entrenched cable, satellite, and telephone companies (known as Multichannel Video Programming Distributors, or MVPDs). Was $39.99 per month a sustainable price point for Hulu's new virtual MVPD (vMVPD)? How big a war chest would the company need to succeed in the original programming arena where competitors annually spent billions of dollars? Could Hulu navigate potential conflicts with the individual business plans of its owners: Comcast, 21st Century Fox, Disney, and Warner Bros.—some of the most powerful companies in the entertainment business?

Keywords: television industry; internet; disruptive innovation; competitive strategy; Television Entertainment; Internet; Disruptive Innovation; Competitive Strategy; Price; Media and Broadcasting Industry; Entertainment and Recreation Industry;

Language: English Format: Print 27 pages EducatorsPurchase

Citation:

McGee, Henry W., and Christine Snively. "Hulu: Redefining the Way People Experience TV." Harvard Business School Case 318-002, September 2017. (Revised December 2017.)

Related Work

  1. Case | HBS Case Collection | September 2017 (Revised December 2017)

    Hulu: Redefining the Way People Experience TV

    Henry W. McGee and Christine Snively

    In May 2017, Hulu CEO Mike Hopkins announced the launch of Hulu Live TV, a new offering that would "change the way people experience TV." The new service would allow consumers to bypass traditional cable and satellite delivery and use the Internet to access live streams of more than 40 popular broadcast and cable networks along with Hulu’s existing suite of on-demand programming. Priced at $39.99 per month, Hulu Live TV offered consumers a tremendous savings over traditional cable program packages and allowed subscribers to watch programs on Internet-connected televisions and a wide range of mobile devices. Hopkins also announced that the company would make a major push into the production of exclusive, original programming, one of the industry's most competitive areas. Hulu's new initiatives occurred during a major transformation in the TV industry as the Internet had revolutionized every aspect of the business. Industry observers wondered if Hulu could successfully compete against the entrenched cable, satellite, and telephone companies (known as Multichannel Video Programming Distributors, or MVPDs). Was $39.99 per month a sustainable price point for Hulu's new virtual MVPD (vMVPD)? How big a war chest would the company need to succeed in the original programming arena where competitors annually spent billions of dollars? Could Hulu navigate potential conflicts with the individual business plans of its owners: Comcast, 21st Century Fox, Disney, and Warner Bros.—some of the most powerful companies in the entertainment business?

    Keywords: television industry; internet; disruptive innovation; competitive strategy; Television Entertainment; Internet; Disruptive Innovation; Competitive Strategy; Price; Media and Broadcasting Industry; Entertainment and Recreation Industry;

    Citation:

    McGee, Henry W., and Christine Snively. "Hulu: Redefining the Way People Experience TV." Harvard Business School Case 318-002, September 2017. (Revised December 2017.)  View Details
    CiteView DetailsEducatorsPurchase Related
  2. Teaching Plan | HBS Case Collection | February 2018

    Hulu: Redefining the Way People Experience TV

    Henry W. McGee and Christine Snively

    Teaching Plan for HBS No. 318-002.

    Citation:

    McGee, Henry W., and Christine Snively. "Hulu: Redefining the Way People Experience TV." Harvard Business School Teaching Plan 318-074, February 2018.  View Details
    CiteView DetailsPurchase Related

About the Author

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Henry W. McGee
Senior Lecturer of Business Administration
General Management

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    Citation:

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