Hulu,streaming,and the contemporary television ecosystem

Ownership

Since its creation in 2006, Hulu’s ownership structure has been subject to near-constant change. Originating as a joint venture among News Corp., NBCUniversal (at the time, a subsidiary of GE and Vivendi), and Providence Equity (a private equity firm functioning in this instance as a venture capitalist), Hulu was initially set up like a technology start-up. As such, it was not expected to be profitable when it launched in 2008 but was instead intended to earn a return for its investors through an eventual private sale or initial public offering (IPO). In April 2009, however, this strategy appeared to undergo revision, as The Walt Disney Company (owner of ABC) acquired from Hulu’s other owners a 30% stake in the fledgling company. The fact that Hulu was now owned by three of the four broadcasters meant that Hulu increasingly appeared to be an important part of the broadcasting industry’s own long-term strategy for television delivered via the Internet (i.e. over-the-top or ‘OTT’). At the same time, Hulu’s quartet of owners seemed unable to agree on what this strategy should be, with some owners clearly favoring a quick sale or IPO and others preferring to invest in the longer-term development of the platform. For the first 5 years of its existence, the company’s future was thus often uncertain: a year after Disney’s buy-in, for example, the financial press reported that Hulu was in conversation with investment banks about an IPO (Sorkin and de la Merced, 2010); and although this IPO never occurred, in 2011 Hulu was formally put up for sale, with interest from Amazon, Apple, DirectTV, and Yahoo (Edgecliffe-Johnson, 2011).

While Hulu’s owners tried to negotiate a sale, its ownership structure was undergoing another major change, as Comcast, having received regulatory approval for its purchase of NBCUniversal in early 2011, began the process of integrating the media conglomerate into Comcast’s own corporate structure. As a condition of Comcast’s acquisition, however, the US Department of Justice (DoJ) required that Comcast effectively give up all management rights for Hulu until late 2018. Specifically, NBCUniversal was required to relinquish its Hulu board seat and Comcast executives were forbidden from discussing Hulu with the streaming company’s other owners (US and Plaintiff States v Comcast Corp, General Electric Co and NBC Universal, Inc, 2011). Although Hulu remained ostensibly up for sale for at least another year, with Comcast in the picture and NBC out of the board room, the previous owners’ already tentative agreement to sell collapsed, and in late 2012, Providence Equity, frustrated and (one suspects) increasingly marginalized managerially, exercised a ‘put’ option that required Hulu’s other owners to buy its share of the company (Morrissey, 2012). With Providence out of the picture, Fox, Disney, and Comcast each owned a third of Hulu until mid-2016, when Time-Warner acquired a 10% share of the company (Lev-Ram, 2017).

As we are writing this article, Hulu’s ownership structure continues to change, with regulatory uncertainty making it impossible to predict who Hulu’s owners will be (and what ownership rights they will have) at the time this essay is published. AT&T’s acquisition of Time-Warner (currently under appeal by the DoJ) gives the telecom company a minority stake in Hulu. Major parts of News Corp.’s Fox – including its stake in Hulu – are also set to be acquired by Disney. While regulatory approval looks likely, it is possible that the merger will be subject to the same kind of limitations regarding Hulu that Comcast has been subject to since 2011. At the same time, Comcast will soon be free of its own restrictions and will finally be able to exert some direct managerial control over the streaming company. What such control will look like will depend heavily upon what share of Hulu Disney is ultimately allowed to acquire from Fox, what Disney is entitled to do with its share, and whether Comcast views Disney – at least with respect to the future of OTT – as a partner or competitor.

In sum, Hulu’s ownership structure has since the company’s formation been both complex and subject to constant change. These qualities have made Hulu itself an ever-changing business proposition, as its different corporate parents, responding to rapid change in the television and technology industries, continually reconceive the company’s strategic function. First conceived as a YouTube competitor – what BusinessWeek christened ‘the anti-YouTube’ (Lowery, 2008) – Hulu originally functioned as a combination of catch-up TV service, clip distributor, and social media site (replete with message boards and sharing functions) (Sullivan, 2008). Like YouTube, its video content was also embeddable in web pages and distributed through major Internet sites, including AOL and Yahoo (Lowery, 2008). Once Comcast entered the picture, however, Hulu was gradually reconceived as a competitor to Netflix and thus, especially for Comcast, a potential cable-owned solution to consumers’ defection from expensive cable packages. As the latest round of media mergers takes place, Hulu’s strategic function is certain to change yet again, not only in response to a rapidly changing OTT market, but also as a result of changes to the individual goals of each of Hulu’s owners, their own distinct corporate structures, and the overall balance of power among these owners within the broader television ecosystem.

Despite the fact that its (ever-changing) owners do not all share the same business interests, Hulu has sometimes been represented as a rearguard effort by the television industry to carve out for itself a share of the OTT market (Elkins, 2018; Van Esler, 2016). It is, in other words, ‘old media’s’ attempt to compete with a disruptive tech industry and thereby shore up the business models on which broadcasters, cable networks, and cable providers have traditionally depended. As such, it represents a kind of strategic collusion on the part of old media companies, and the fact that Hulu itself has not been subject to anti-trust considerations underscores the weak competitive positions its owners occupy. We think this perspective has much to recommend it, and it is indeed hard to imagine Hulu’s unique formal features and distinctive approach to ‘flow’ developing without the oversight of companies steeped in the business models of legacy television.

In other respects, however, Hulu seems more appropriately described as a technology company. Despite investing in original programming as early as 2012, the company’s main focus for most of its history appears to have been on the technological side of streaming. Paradoxically, this has partly been a result of Hulu being owned by legacy television companies: as default licensee for much of its owners’ television content, (and, until recently, having little to invest in original programming), Hulu has long been able to focus on interface development, meta-data management, and video delivery as much as it has content acquisition. CEOs aside, many of its managers have also come from the tech industry (including Microsoft and Netflix), and a large share of its workforce consists of engineers, software developers, and information-technology specialists (LinkedIn, 2018).

Unlike most subsidiaries of media conglomerates, Hulu also appears to have been left alone by its owners to function much as an independent start-up or in-house tech-company ‘experiment’ would. Although no doubt still constrained by its owners’ broader interests, compared to MovieLink and UltraViolet (the previous two attempts by media conglomerates to develop shared streaming video platforms (see McDonald, 2007: 172–174; Steirer, 2015)), Hulu has been left more-or-less free to develop and implement its own strategies. To some extent, this appears to be the effect of the particular way the ‘joint venture’ was originally structured, with Providence Equity’s involvement predicated on the expectation that Hulu would eventually be sold. For such an outcome to be feasible, the company needed to maintain a basic level of independence. But Hulu’s independence is also a product of carefully designed regulation: by allowing Comcast to own a third of Hulu but not actively manage it, government regulators helped to ensure that Hulu could function with relative autonomy.

Hulu’s corporate DNA is thus very complicated, but our point is not merely that Hulu is complicated. Rather, business enterprises are themselves complicated, and scholarship would be wise to highlight and wrestle with this complexity rather than trying to simplify it in the form of ‘tech’ versus ‘media’ binaries or ignoring it outright. The influence of tech-company discourse on the way we think about streaming has been especially unfortunate in this regard, for it is too easy to think of tech companies such as Netflix and Amazon as benefiting from a kind of organizational simplicity previously unknown in television. Indeed, part of the attraction of studying Netflix, we believe, stems from the fact that Netflix purports to be a much ‘simpler’ business enterprise than the traditional media conglomerate. Producing its own original content and streaming it, advertisement-free, in any nation in which it has made its service available, Netflix masquerades as a company that (the licensing of older content notwithstanding) is unconstrained by the complex web of industrial relationships and regulatory constructs that bind legacy television companies together and limit how they can and cannot act. We believe, of course, that approaching Netflix in this manner is best resisted, as it is caught up in a similar web of relationships and regulatory constructs, especially in markets outside of the United States (Carnelio-Marí, 2017; Steigler, 2016; Ward, 2016). We can make visible a richer understanding of television writ large by focusing on the structure and nodes of this web rather than Netflix’s own (real or purported) exceptions.

Deal-making

Hulu’s complex organizational structure can also help us to better understand the economics of corporate deal-making. Both trade discourse and media scholarship have often assumed that media companies achieve substantial advantage and increased revenue by limiting the distribution of the content that they own to their own distribution venues via what is typically called ‘vertical integration’. Sometimes also referred to as synergy, self-dealing, or internal licensing, such behavior is sometimes even characterized as anti-competitive or monopolistic. Economists and management scholars, by contrast, have exhibited considerable skepticism regarding the financial wisdom of such deal-making (Perren and Steirer, in press). This is because for internal licensing to result in additional revenue beyond what could be made through a sale on the open market, the distribution arm of the company that owns the content must pay either more or less to its production arm than what the content would receive through open-market bidding. According to economic theory, internal licensing should thus result in no additional profit for the company; it will merely transfer revenue from one unit of the company to another – what economists call a ‘zero-sum transfer’.

The example of Hulu illustrates just how complex and, at times, difficult to evaluate the logic of licensing can be. First, as Hulu’s strategy suggests – and in keeping with economic theory – distribution need not be an either-or game. Unless a content owner believes it can earn increased revenue by exclusively licensing a piece of content to only one streaming site (which may be one it owns), there is often more money to be made by licensing that content to multiple distribution outlets. Such has long been the strategy of Hulu’s owners: the majority of the content they own can be found concurrently on Hulu, their self-branded streaming services, and sometimes other platforms as well. Licensing to multiple services, including Hulu, has also been the strategy of legacy media companies with no ownership stake in Hulu, such as CBS, Discovery, and Viacom. Things are quite different with Netflix, which is unique among television content owners in restricting the distribution of virtually all the content it owns – both ‘current’ seasons and past seasons – to its own streaming platform.

On the face of it, a company adopting a strategy of exclusive internal licensing seems to possess a competitive advantage over companies that license more broadly, as the exclusivity will ensure that it is the only service through which consumers can ever view any of its content. From the perspective of economics theory, however, heavy or exclusive reliance upon internal licensing can have negative effects on both the companies that rely on it and the industry as a whole. For one, without the market functioning to determine, through competitive bidding, the value of content, media companies risk mis-valuing the content they license internally. In addition, heavy reliance on self-dealing can make managerial oversight and evaluation more difficult. This is not only because company balance sheets may inaccurately reflect where value is being generated, but also because managers may be under pressure to over-value new content that their company owns. Not surprisingly, given Netflix’s strategy, media analysts have recently begun to worry that Netflix is already suffering some of these problems (Gerber, 2018).

What is more surprising, given Hulu’s very different licensing strategy, is the fact that Hulu appears to be suffering from them as well. As media and tech analyst Rich Greenfield (2018) has recently argued, Hulu’s corporate parents appear to be charging Hulu especially high license fees, particularly for exclusive licensing rights to shows such as This Is Us (Goldberg, 2017). These high charges result in additional profit on the parent companies’ balance sheets but contribute to Hulu’s losses. That Hulu has never reported a profit thus appears to be in part because its parent companies are in effect employing accounting tricks to claim for their other divisions some of the revenue that Hulu would be generating if the contracting occurred under normal market conditions. Of course, since these companies’ own Hulu, Hulu’s financial loss is ultimately their own; but the streaming company’s complex ownership structure tends to obscure this, in the process distorting the market for streaming content and making it hard to assess Hulu’s economic performance.

Hulu’s extension into original production adds even greater complexity to the marketplace for high-end streaming content. In comparison to Netflix or Amazon, Hulu at first appears to offer little value to original content creators. It has no studio of its own; creators must thereby engage a third party to produce or co-produce original content. It also has a relatively small budget for content acquisition and thus has not been able to match the ‘megadeals’ its competitors have made with marquee talent like Shonda Rhymes and Jordan Peele. Hulu’s biggest handicap, however, appears to be its domestic business model: while the company maintains it wants to make its content available around the world, it has no explicit timeline or public strategy to do so; instead, Hulu’s streaming service is restricted to consumers in the United States and Puerto Rico (as well as to consumers who are stationed abroad on US military bases). Yet, we contend that these dismissals drastically underestimate the value proposition Hulu offers creators. In fact, as one executive we spoke with argued, the site’s domestic orientation offers a distinctive advantage in the contemporary television marketplace.

It is true the advent of global studio-networks like Netflix have changed the contours of deal making in the television industry. As Lotz (2018) notes, ‘Netflix introduced changes to standard license agreements [by] paying more for series up front but often offering talent no back-end potential because Netflix’s series were unlikely to be sold through multiple windows’ (p. 224). The acquisition fee Netflix pays when it commissions original content is thus often higher than what content creators can attract from either Hulu or a traditional network. According to one producer who spoke with us, it is not uncommon for Netflix to pay the full cost of production plus an additional 10% or 15% (colloquially referred to as ‘the Netflix premium’). In exchange, the creator gains immediate access to a global market but forfeits their participation in any further revenue earning activities. While some producers have successfully negotiated to retain a financial stake in their content, they face an uphill battle: Netflix typically imposes significant periods of exclusivity in markets where it has a presence, plus foreign broadcasters are unlikely to license a title from a producer when the content’s simultaneous presence on a competing SVOD platform risks cannibalizing its audience (Patel, 2018).

Hulu, however, structures deals differently. Because the platform lacks both a studio and global presence, it not only needs independent content creators, but also allows them to retain an ownership stake in the shows they produce. In this way, the licensing agreements are similar to legacy practices. Hulu pays a smaller upfront licensing fee that covers only a portion of production costs in order to secure exclusive distribution rights in the US. Studios, then, can offset the financial deficit incurred from production through subsequent sales to different markets and windows, including lucrative deals with international broadcasters and streaming services in foreign territories. For example, Hulu licensed The Handmaid’s Tale from MGM TV, leaving that company’s international distribution arm the ability to license the show internationally. While US audiences recognize the series as a Hulu Original, Australian audiences only had access to the program through a public service broadcaster’s free, ad-supported, on-demand platform, about 3 months after the first season ended in the United States. Given the show’s popularity, the same broadcaster negotiated different rights for the second season, which first appeared ‘direct from the US’ on its linear schedule before moving to the broadcaster’s on-demand platform.

The distinction in how deals are structured not only changes the viewing contexts for the same content in different markets, but also represents a potential boon for content creators who can, in theory, leverage different deal structures to open up discussions about what deals work best for different formats and genres. For example, producers with more culturally-specific or ‘riskier’ content might find the higher upfront fee and immediate global audience from Netflix an easier proposition than struggling to sell their series on a territory-by-territory basis. By contrast, a producer more confident about her content’s global appeal might wish to seek a deal with Hulu that enables her to control global rights.

Of course, the process of deal-making for content is extremely complicated and involves many more aspects than we have considered here. Nevertheless, we think the kind of economic and value-based frameworks we have applied are necessary to establish more nuanced understandings of how television companies of all kinds – and especially streaming companies – manage the content they own. How does, for instance, Netflix’s insistence upon internal licensing effect the company’s profitability, the earnings of its creative workers, its organizational culture, its relationships with other television companies, and the kind of content it produces and streams? Rather than accept that the logics that inform all streaming business operations and decision making are uniform, coherent, or even economically sustainable, we need to grapple with how the market for content actually functions, and how these functions change.

Aesthetics

Recently, Lotz (2017) has suggested that one of the major distinctions between legacy television and contemporary, streaming television is the disruption of the traditional ‘flow’ model, both with regards to programming and with the aesthetic experience of watching television. Lotz’s analysis is perceptive and, especially when applied to the streaming services of Netflix and Amazon, illuminating. An examination of Hulu’s content-delivery model, however, reveals an alternative construction of what streaming is, aesthetically, and suggests a much closer relationship between streaming and that of the older model of televisual flow.

First, unlike Netflix, Hulu observes a traditional weekly release schedule for new content, both licensed series and its original programming. Although catch-up binge viewing remains possible, for new seasons of shows such as The Looming Tower, Casual, and Bob’s Burgers, viewers must watch new episodes as they are released week-by-week. Although not quite the same as watching live television, the resulting aesthetic experience maintains a programmatic or ‘linear’ quality that is clearly modeled upon legacy television practices. For hit shows like The Handmaid’s Tale, such a viewing experience lends itself to legacy models of consumer-interaction: ‘water-cooler’ talk, fan-produced episode breakdowns and reviews, repeat viewing of previous weeks’ episodes, and ritualized communal viewing arrangements. As a Hulu executive explained to us, the staggered release schedule also helps the company maintain and augment ‘buzz’. Whereas the amount of media attention a hit Netflix original series typically receives begins falling off sharply a week after its release (Kerns, 2016), the first season of The Handmaid’s Tale (like many hit cable series) remained an object of attention and discussion for the entirety of its 2-month release schedule. Such sustained exposure not only helps Hulu reduce subscriber churn, but we were told it also aids in the company’s marketing efforts.

In keeping with Hulu’s weekly release schedule for new-season content, Hulu also employs what we might call a ‘schedule aesthetic’ to structure how users experience its service and use its interface. Unlike most other streaming services, Hulu’s visual interface foregrounds the temporality of its content, informing users not only when a new episode of a show they watch has been made available, but also when the next episode will appear and when older episodes are set to expire (see Figure 1). Proceeding each individual stream, Hulu furthermore inserts a promotional advertisement indicating the day, hour, and (if the show is currently on hiatus) the date on which future episodes will be released live on the show’s respective broadcast or cable network. Because the interface revolves so heavily around content schedules (some mirroring broadcast and cable schedules, some unique to Hulu), the experience of using the service is in part that of managing – or even micro-managing – this temporality.

OPEN IN VIEWER

Figure 1.

Hulu’s ‘Details’ page for Trial & Error.

A schedule aesthetic also informs how Hulu approaches search and discovery for its content library. Whereas Netflix and Prime Video present their libraries as a procession of tiles extending endlessly off the screen both horizontally and vertically, Hulu’s current design (implemented in January 2017) under-emphasizes the library as such by visually presenting television shows one series at a time (see Figure 2) and restricting the number of series that can be browsed from any of Hulu’s main ‘pages’ to 19. Despite the comparatively large amount of screen real estate this produces, Hulu has also elected not to autoplay content the way Netflix does during browsing activities. These design choices are intended to partially decouple the acts of discovery and consumption and thereby make browsing slower, less impulsive, and in some ways more difficult than it is on Netflix. Television shows are proffered not as non-linear binging opportunities but as long-term, quasi-linear consumption opportunities, each with its own inherent rhythm of engagement. Indeed, the aesthetic experience of navigating Hulu’s interface is more in line with that of interacting with a modern digital video recording (DVR) interface, albeit an especially polished and responsive one, than it is with Netflix: one is constantly being hailed not just as viewer watching right now but as a viewer committed to watching particular shows over time.

OPEN IN VIEWER

Figure 2.

Hulu’s main TV page.

The resemblance between Hulu’s current schedule aesthetic and that of televisual flow might at first appear to frame Hulu’s strategy as inherently conservative. Rather than disrupt and revolutionize, it attempts to resurrect – no doubt in the interests of its owners – an aesthetic model more appropriate to legacy television than streaming. We believe such a view is only part of the picture, however, for Hulu’s current interface was expressly designed to solve a techno-aesthetic problem posed not by the past but by the future: the integration of OTT video-on-demand with live OTT streaming. Because live streaming is substantially more technologically demanding than that of VOD, it is a relatively recent technology, with its earliest offerings in the United States dating back only to 2015 and being limited to either user-generated content (as on Facebook Live) or re-transmissions of broadcast and cable channels (as on Sling.TV). However, Hulu’s live service, launched in May 2017, is the first attempt to bridge VOD with live streaming of both long-form, high-budget television content and time-sensitive, unscripted programming, such as talk shows, news, and sports events. Hulu’s current interface was created primarily for this purpose.

When a consumer subscribes to Hulu Live (which comes bundled with Hulu’s VOD service and includes DVR capabilities), the new content utilizes the same interface as the VOD service, with the series pages now indicating when the next live episode is on and if new ‘DVR-ed’ episodes are available. The interface also utilizes both manually inputted preferences and viewing history to populate the primary pages with series and live content (such as a sporting event involving a favorite team) that it has guessed, algorithmically, or that the viewer herself has indicated she likes by having added it to her ‘stuff’. As advertising agency David Campanelli (qtd. in Poggie, 2017) explains, ‘When Hulu serves up recommendations to users there’s no distinction between what is airing live, what is on-demand, and what is a Hulu original’. The result is a live-television browsing experience that is structured identically to that of Hulu’s VOD browsing. In fact, Hulu’s interface was originally designed to obviate the need for the kind of channel guides utilized by cable satellite companies altogether, and in its early beta offering it did not include them. Although this proved too radical for early users (Spangler, 2017) and the service now offers such a guide, the guide is clearly intended to be a secondary tool, as browsing there continually funnels the user back to the individual episode pages. Whether Hulu’s interface can train users to dispense with the guide remains to be seen, but the series pages nevertheless offer a novel reimagining of what a hybrid live/VOD streaming aesthetic might look like, with the series, program, or event itself – and not the channel, guide, or content library – serving as the primary point of viewer orientation.

There is yet one additional aspect of Hulu’s construction of streaming that has been closely modeled upon commercial broadcasting’s traditional delivery model, and that is the incorporation of advertising. For most subscribers, Hulu’s VOD streams are interrupted at regular intervals by short sponsored ads. Watching television on Hulu, whether live or on-demand, thus entails both the same temporal disruptions and the same inducements to consume that characterize the experience of watching legacy television. Although Hulu’s VOD ads are often unique to Hulu, the sponsors are typically the same as those found on legacy television during prime-time hours: large corporations selling consumer goods or services. During Hulu’s early years, it sometimes failed to sell sufficient spots, which resulted in viewers being served the same advertisements multiple times during a single show (Newman, 2016). In recent years, however, demand has begun to exceed supply, in part because Hulu’s exclusive reliance upon heavily vetted broadcast and cable content has made it a more attractive place for big advertisers than Internet sites featuring user-generated content (Schomer, 2018).

Although not expressly having to do with Hulu’s aesthetics, it is also worth noting here that Hulu’s reliance on advertising situates the company’s profit model close to that of legacy television channels, most of which rely upon a mix of subscription/re-transmission-fee and advertising revenue. This is not to say, however, that the two approaches to advertising are identical, for Hulu has leveraged its position as the only major advertising-funded VOD subscription service to experiment with new forms of interactive and data-driven advertising, including what it calls ‘ad-selector’ (a feature that requires a viewer to pick which ad she sees, in the process generating data about her preferences for Hulu), ‘branded entertainment selector’ (which enables a viewer to watch a single long-form ad instead of having regular ad breaks), and ‘t-commerce’ (which enables a viewer to purchase the advertised product using Hulu’s own interface) (Hulu, 2018). More mundane-sounding but perhaps more transformative over the long run, other experiments include viewer-specific ad insertion/replacement within DVR and live streams (Poggie, 2017). Whether these innovations will pan out is, of course, an open question, but – as legacy television has long recognized – advertising provides both a useful hedge and a valuable supplement to straight subscription revenue and can help underwrite the cost of content acquisition. Indeed, as a Hulu executive explained to us, a subscriber to Hulu’s basic plan (which includes advertising) is significantly more valuable to the company than a subscriber who chooses Hulu’s premium ad-free plan.

As the above analysis of Hulu’s streaming aesthetic demonstrates, there is nothing inherent about streaming as a technology or business venture that necessitates non-linear or temporally unrestricted viewing experiences. Indeed, Hulu’s interface suggests that we might understand streaming not as an end or alternative to televisual flow but as the adaptation or evolution of flow for the new space of OTT content delivery. Although Hulu stands out from Netflix and Prime Video in this regard, it is not as exceptional one might first think. OTT streaming is offered by numerous providers, not the least of which is YouTube, which in the past year has followed Hulu in attempting to integrate live broadcast and cable streaming into its platform. Indeed, when we consider live streaming through such services as YouTube, the PlayStation Network, Shudder, Twitch, Sling.TV, DirecTV Now, Facebook, and Twitter, ‘live’ viewing seems less a vestige of legacy television than the next big frontier of streaming. That we as media scholars have largely ignored it in our conversations about television streaming is no doubt in part because it is a relatively recent technology; but we also suspect that it seems less exciting to research because it appears at first either too similar (the live streaming of broadcast/cable feeds) or too dissimilar (the live streaming of user-generated content) to the aesthetics of legacy television. Whatever the case, we think it would be well worth devoting more attention to these forms of streaming, and in doing so more rigorously investigate the continued appeal to consumers of ‘off-demand’ television.

Conclusion: a prescient alternative

The intensely competitive nature of the commercial broadcasting system in the United States makes the idea of a platform like Hulu seem almost laughable: an uneasy partnership among unlikely allies destined for failure (predictions about its imminent demise have plagued the platform from its inception). Yet, for reasons we have discussed, its success demonstrates a novel business model in which legacy media companies can collaborate effectively and offer a product with value that is distinct from its competition. Perhaps present-day developments make the competitive advantage of a platform like Hulu even clearer. As Netflix continues to reformulate itself into a global channel for premium television content, its commitment to original local productions increases. As a consequence, its role as an aggregator of licensed content, especially recent broadcast content, declines precipitously (Santos, 2018). For consumers, this shift risks removing content from the digital ecosystem altogether, scattering it across distinct and disparate streaming silos, or leaving it in the hands of pirate sites. In such instances, no matter the market, the need for a local, on-demand, multi-channel, and platform agnostic content aggregator sounds compelling.

Yet, in a 2018 headline, The Guardian heralded what it called ‘Netflix’s ‘New World Order’’ and proclaimed the ‘streaming giant [was] on the brink of global domination’ (Usborne, 2018). Meanwhile, in an article published just a few months later, Bloomberg set the stage for an epic battle between European TV broadcasters and a ‘common streaming enemy’ (Netflix) who was extending its reach into local territories (Seal et al., 2018). The narrative is a familiar one for anyone who follows popular news and trade press coverage: the global presence of Netflix and Prime Video stokes concerns about the threat they pose to local industry practices and televisual cultures. For obvious reasons, Hulu has been absent from these conversations, but such inattentiveness ignores what the company’s own global entanglements might tell us about the future of streaming television. As a conclusion, we want to resurrect two of the companies early but failed business ventures to illustrate a competing, and somewhat prescient, narrative about what constitutes Internet-distributed television at different historical junctures and within diverse industrial and cultural settings.

Early in its history, the company became the first American streaming platform to enter the Japanese market when it launched its streaming service there in 2011. Hulu Japan offered users an easy-to-use portal for anytime, anywhere access: a platform-agnostic content aggregator in a market where video-on-demand access was exclusively linked to different smartphone contracts. Hulu Japan offered unlimited, ad-free access to content across multiple devices for a low, single monthly subscription fee. Japan was a compelling market for Hulu for two reasons: (1) the country has some of the fastest broadband speeds and highest penetration rates in the world, and (2) it looked to be one of the fasted-growing SVOD markets in Asia (Jarnes, 2016). Yet, Hulu’s first-to-market strategy may have been ahead of its time. Despite the anticipated growth, Japan consumers have been slow to embrace SVOD services (Mulligan, 2015). Free-to-air television and other no-cost options, like YouTube, remained prevalent at the same time as competition increased: both Netflix and Prime Video launched in Japan in 2015, bringing with them larger spending budgets and much more fanfare about local content. The country’s legacy media companies took note of these changes and concluded, much like Hulu’s American owners had a few years earlier, that they needed to develop and control their own SVOD offerings.

Perhaps this is why Hulu decided to sell its Japanese outpost in 2014 to the country’s oldest and largest legacy broadcaster, Nippon TV. Today, a subsidiary of Nippon TV continues to license the Hulu brand and technology, but Hulu Japan operates as an entirely distinct company from its US counterpart. The service remains an aggregator for content from America, Japan, and other Asian providers while taking initial steps into live streaming, local original content production, and co-productions. With more than 1.3 million subscribers, Hulu Japan remains the second most popular streaming service after local competitor dTV (whose access is linked to a smartphone contract) but promises by Netflix and Amazon to raise investments in local content pose significant threats to the competition (Shackleton, 2015). Coincidentally, in 2015, Nippon TV joined another streaming venture that sounds remarkably similar to Hulu’s initial model in the States: a free, ad-supported, platform-agnostic collaboration among the country’s five leading broadcasters forged as a preemptive measure against Netflix and Prime Video (Brzeski, 2015).

A few years earlier, Hulu, in 2009, announced its intention to launch a free, ad-supported service in the United Kingdom with shows from Channel 4, ITV, and possibly even the BBC (Bingham, 2009). At the time, the UK market was dominated by the distinct catch-up services of the major broadcasters, primarily BBC iPlayer (launched in 2007) and Channel 4’s 4oD (launched in 2006). Coincidentally, Hulu’s announcement came on the heels of the scuttling of broadcasters’ own initiative to collaborate in the streaming video marketplace. Given the working title of Project Kangaroo, the initiative was an attempt to coordinate the on-demand services of Britain’s three largest broadcasters: ITV, Channel 4, and BBC Worldwide. The joint venture was first announced in 2007 with the intent to aggregate content from broadcasters and third parties, provide an archive of older programming, and offer a mixture of ad-supported streaming, transactional video-on-demand, and electronic sell through options to consumers. Yet, the initiative was beleaguered from the start: partners had to resolve conflicting agendas with respect to their own standalone catch-up services and work through the quagmire presented by catalogs of disparate content rights (Sweney, 2008). Despite some significant progress (it had appointed a CEO and 50 staff members), Project Kangaroo was constantly dogged by government regulators who, in 2009, blocked the service from ever launching, arguing it posed too much of a threat to other services in the on-demand marketplace.

The decision left Britain open for an outside service, like Hulu, to make inroads into the streaming video space but the context likely proved too fraught for plans to gain any traction, and Hulu’s own plans for the United Kingdom were soon shelved. As a result of these failures, ‘digital distribution in the UK [emerged] as an arena characterized by a multiplicity of digital services for viewing film and television online’ (Evans and McDonald, 2014: 162). Because local broadcasters focused upon supporting their own individual catch-up services, by the time Amazon and Netflix launched in the United Kingdom in 2010 and 2012, respectively, their SVOD services faced little competition. Today, nearly 10 years after Hulu expressed its initial interest in the United Kingdom, the situation has come full circle: rival broadcasters across Europe are forging unprecedented partnerships in the SVOD marketplace to address audience fragmentation. Explicitly citing Hulu as their template, the broadcasters plan to offer a single online access point for content previously scattered across disparate services and linear broadcasting schedules, hoping the collaboration will help them compete with the popularity of Netflix and Amazon (Seal et al., 2018).

We summarize these developments here not to offer a comprehensive account of Hulu’s global entanglements, but rather to underscore diverse manifestations of what streaming television is and can be at different times and in different places. As these examples suggest, streaming remains a multi-sited, quasi-iterative, and rapidly evolving marketplace, in which legacy practices persist alongside and often in competition with new modes of production, dissemination, and consumption. Yet, dismissing Hulu as a ‘mere’ domestic platform beholden to legacy practices underestimates the potential alternative its business model offers media companies and ignores the critical role it plays for content creators in the global-television-market value chain. By inserting Hulu into a conversation about the contemporary television ecosystem – a context from which it has been absent for too long – we have aimed to broaden the scholarly conversation beyond that of Netflix and Amazon and make us reconsider some of the emergent conventions or common-sense norms that underpin our understanding of television in the Internet era.