Hulu’s “No Sellout” advertising campaign – featuring Damian Lillard, Joel Embiid and Giannis Antetokounmpo – plays off consumer cynicism towards influencer marketing campaigns (thanks: Fyre Festival) to draw attention to the service’s live sports content. In the humorous spots worth watching (hit the links in the player names), the NBA stars offer up some refreshing “honesty” – they’re only promoting the corporate message “Hulu has live sports” because they’re being paid. The campaign, designed to poke fun at brands using paid influencers in advertisements disguised as organic content – and the influencers who act as if that is not the case – has resonated with a consumer well aware that “athletes are getting paid a lot of money to endorse these products.”
Howie Long-Short: The pursuit of live sports programming gets away from the Hulu’s core “on-demand” mission, but the game window is only 3 hours long and fans follow their teams 24 hours/day. Wayne Sieve, EVP of Thuuz Sports believes that “there’s all kinds of shoulder programming – with a shelf-life – that would be relevant to the passionate fan and supplement any live rights that they might have; and the on-demand portion of Hulu is built to service that content”.
Live sports rights are expensive and there’s “enormous competition for that 3-hour window”, so Hulu won’t be pursuing the “network feed” of games; instead, their plan is to serve up “alternative broadcasts.” The company’s sports strategy will place an emphasis on interactivity and personalization. Subscribers will be able to “choose between stats-heavy broadcast overlays or a stripped-down display”; they’ll also be able to record and watch later (for the next gen. of fans who won’t watch 2.5 hour broadcasts) and catch games on mobile devices.
It remains TBD if there is a consumer that is willing to pay for a data/insights driven broadcast, but even if there’s not Wayne sees Hulu’s addition – as well as Amazon, Facebook, DAZN etc. – to the sports broadcasting landscape as a win for fans. “The linear broadcast networks have gotten lazy. The exclusive rights deals signed before streaming became prevalent meant they didn’t have to work very hard to retain the viewer. New competition forces those with broadcast rights to make their product more compelling. They now need to provide a value proposition to the viewer greater than what can be obtained from another platform.” It’s also a win for the leagues. “As the number of bidders increases, so too does the price of their broadcast packages.”
Hulu’s (25 million domestic subs) decision to supplement its on-demand programming with live television runs contrary to Netflix’s (58 million domestic subs, 81 million international) stated strategy. While it currently serves as a differentiator between the 2 services, Sieve is expecting competitors – including Netflix – to eventually follow the company’s lead. “If you’re in the content business, you have to pursue sports programming; and if you’re going to do sports, then you have to do them live. It’s only a matter of time until everyone with this type of VOD entertainment experience offers live programming.”
Speaking of “everyone”, Hulu is owned by The Walt Disney Co. (60%), Comcast/NBCUniversal (30%) and AT&T/Warner Media (10%). Each of those companies has plans to launch their own streaming service and Disney already has ESPN+ for sports content. It will be worth watching if Hulu “rides the coattails of their parents to acquire sports rights because they can’t compete on a dollar for dollar basis with a company like Amazon.”
Fan Marino: Getting back to the commercials for a second, Howie wrote in Monday’s newsletter that “the U.S. consumer had wised up to the pay-to-wear sponsorship model, realizing that celebrities/athletes will endorse whatever they are paid to wear.” The commercial makes light of a problem that brands are encountering (which is why they’re looking outside of sports), but a Mavrck survey of over 1,000 influencers found that consumer distrust is warranted; 40% of influencers admitted to failing to follow guidelines for proper disclosure.
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