Hulu response. biz5hulu

According to Peter Drucker, “… a firm needs define itself not by the product it sells but by the customer benefits produced” (Notes on Marketing Strategy).This seems to have been one of Hulu’s core principles as summarized by CEO Jason Kilar who said “I’m obsessed with user feedback”. Hulu created a “community hour” during which staff members responded to feedback and inquiries from users. To further understand and satisfy customer needs,Hulu made its site interactive. Registered users could participate in discussion forums, ratings, reviewing videos and sharing interests with other users.Thus, Hulu kept to the marketing strategy of meeting Customer Needs (one of the 5 C’s),though they had limited or no access to some highly rated products from their content providers who were in turn required by cable operators to limit the number of episodes available online.

Another one of the 5 C’s in Marketing Strategy applied by Hulu is that of identifying, attracting and working with collaborators to increase value. Hulu’s content providers (FOX,NBC Universal, Warner Bros. etc) were companies of high standards and reputable quality. Thus it was easier to convince users. Besides, Hulu partnered with over 30 websites in a bid to bring content closer to users. Sites like AOL, Fancast, Facebook, Yahoo!, Myspace etc. could integrate Hulu’s content into their offerings and earn 10% of the advertising revenues Hulu got from the traffic they generated. About 50% of Hulu’s traffic was estimated to come from outside, meaning the strategy worked well.

Finally,it is hard to tell if Hulu knew beforehand that apart from a giant in the sector like Youtube, its content providers would somehow pose as competitors in the sense that they streamed some of the highly rated episodes denied or withdrawn from Hulu on their own websites.  Also, Youtube attracted 10 times the number of Hulu users. Youtube did not partner with giant structures per se, but the fact that it gave room for unlimited user-generated videos attracted more users than Hulu. Other video streaming sites like Netflix have also overtaken

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Zinio response

The Magazine Publishers of America (MPA) said, amongst other things, that by 2005, “the popularity of reading was at an all-time high and had beaten watching TV as the number one leisure activity (surpassing other categories such as going to the movies, computing and listening to music).This certainly meant Magazine was potentially the most lucrative media/publishing business in the US. But was it the same in Spain? If yes, then Raul Suarez was right to think it was time for Zinio Spain to be made a more profitable and viable business.

The idea of going digital was good in the sense that the digital magazine sales strategy had already been tested and Zinio US alone accounted for 70% of the 5 million worldwide subscribers at the time. However, it would have been a little misleading for Zinio Spain to expect similar results in Spain because:

  • According to Exhibit 1 of the case study, Spain ranked very low among other European countries in terms of access and use of internet, mobile phones and other digital equipment which are all instrumental in the digital magazine sales business.
  • Exhibit 11 shows that Spaniards preferred print over digital magazines because of ease of reading, sharing with friends and portability.

Zinio however embarked on a somewhat productive marketing strategy and as more Spaniards used the digital service, more of them found it better than print in terms of comfort of reading, ability to navigate and find references to articles, ease to store/archive and especially the automatic delivery of issues (3-7 days before print).

The question that comes to mind is ‘what kind of market research questions gave them the green light to go digital in a country considered digitally immature at the time?

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