How the growth of Hulu and set-top boxes is changing television

The first fiscal quarter of 2011 is coming to an end. The moment for companies to summarize their achievements and stats. Some interesting figures about web video and the growth of set top-top boxes hit the web today. Below I discuss some figures on Hulu and set-top boxes. reported on the growth figures of the web video service Hulu, that will pace 500 million dollars in revenue in 2011. In the first quarter of 2011, Hulu’s revenue grew around 90 percent over the same quarter in 2010. Hulu and Hulu Plus shows content from 264 partners compared to 211 the year before. Especially the return of Viacom resulted in the addition of popular channels such as MTV, Comedy Central, VH1, and BET. Despite these big numbers of revenue and channel growth, the users only initiated 10 percent more streams compared to the same period in 2010. This seems like a low number considering the (re)introduction of popular channels, and the new subscription based service in the form of Hulu Plus, which was introduced in November 2010.

Hulu Plus, as a new paid service, is expected to exceed 1 million subscribers in 2011 (versus 0 in 2010), which is the fastest start of any online video subscription service according to Jason Kilar, CEO of Hulu. Part of this success is because of the large user base of the existing free Hulu service. Numbers (.pdf alert!) from the convergence consulting group indicate that Hulu and its online distributors & the CBS Audience Network are responsible for more online viewers than the individual broadcaster websites combined. As a concluding remark they note how Netflix and Hulu Plus have begun to encroach on TV subscription. I predict that 2011 will show a growth in ‘cord cutters’ as long as content owners see the relevance and value of these new distribution methods and business models.

The growth of Set-Top Boxes

The research and consulting firm Infonetics presented some figures on the growth of set-top boxes. Their research findings show that over-the-top (OTT) media servers such as Apple TV, Google TV, Roku players, and Boxee, experienced the strongest sequential growth, as content distributors such as Netflix and Hulu launched low-cost streaming services toward the end of the third quarter of 2010. Teresa Mastrangelo, directing analyst at Infonetics Research, notes; ‘In the fourth quarter of 2010, we witnessed the dramatic growth of over-the-top services, as service providers and equipment vendors hit the ‘sweet spot’ for pricing. However, these services continue to complement pay TV rather than replace it’.

An interesting comments figuring the growth of OTT set-top boxes, online video platforms, and the growing interest in new TV concepts such as smart TV, IPTV, and connected TV. However, as I’ve written in an earlier post‘these devices, concepts, and software platforms, are trying to provide a balance between the liveness of real-time television found in live shows, sport events, and reality TV, the traditional flow of couch potato television, the social aspect of living room television, and the networked, interactive, accessible, and social aspects of the internet’.


These first figures of 2011 promise an interesting year for the broadcasting industry, and provide some early indications of significant changes in the way consumers experience and receive television. It’s going to be interesting which content provider, distributor, and broadcaster will recognize and react to these changes in demand.

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