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Hulu’s CEO Speaks Out on the Future of TV Advertising

Last week, Hulu’s CEO Jason Kilar wrote a blog post about the future of TV and web advertising that folks say was tantamount to him writing his resignation. The crux of the post is that TV execs are stuck doing business the old fashioned way and as such, are squashing the progress of web TV which is much more appropriate for today’s mobile society.

He makes three big points which demonstrate why web TV is more powerful than traditional TV:

  • Traditional TV has too many ads
  • Consumers want TV to be more convenient for them.
  • Consumers are demonstrating that they are the greatest marketing force a good television show or movie could ever have, given the powerful social media tools at consumers’ disposal.

He’s right. Across the board, he’s right. The amount of commercial time per episode has doubled since the golden age of television. The fact that DVR usage has grown 90% in the past few years, tells you that people want to watch TV on their own schedule. And look at the rise in On Demand programming and streaming video. Face it, the 8:00 to 11:00 TV schedule is becoming a thing of the past.

His third point is my favorite. Never underestimate the power of TV fans. They’ve saved shows, had actors ousted and they’ve put their purchase power to work on behalf of brands that support the cause. Again, he’s right. The problem is, network execs don’t want to hear it, or so says Kilar.

Our journey at Hulu involves significant risk. That is the nature of innovation, particularly the business of re-inventing television. A number of you that are reading this might be thinking that we’d have to be crazy to think that our small team can actually re-invent television and compete effectively against a landscape of distribution giants like cable companies, satellite companies, and huge online companies. We are crazy. All entrepreneurs need to be.

Well said, I say. Kilar’s post goes on to explain in great detail how he sees the change in the TV landscape and how going online can be profitable for everyone. If you’re at all interested in web TV advertising, you should take a few minutes to read the full post. He describes a system that combines ad-support free video with exclusive offerings via a subscription supported model. What he’s not saying, is that TV advertising is a thing of the past. TV isn’t going away but by offering consumers an alternative you open up new opportunities for advertisers that are better targeted and more cost-effective and that sounds like a win-win for everyone.