A show about nothing could be something big for Hulu.
Jerry Seinfeld took the stage at Hulu's annual presentation before potential advertisers to promote the company's deal to exclusively stream all 180 episodes of the 1990s sitcom juggernaut. Snagging the deal is a major coup for Hulu, and came with a hefty price tag estimated at $700,000 to $1 million an episode.
It was the main event to an already robust fete in which the Santa Monica-based company trumpeted its ramped-up slate of original series, which includes star power from big names such as J.J. Abrams, James Franco and Amy Poehler.
For Hulu, which has become something of an underdog to well-funded rivals like Netflix and Amazon, it's all in a bid to attract more subscribers at a pivotal moment. Cord cutters, like never before, are turning to the Internet for subscription entertainment services.
And it is perhaps the biggest gamble yet for Hulu Chief Executive Mike Hopkins, who was brought on board two years ago to transform the company into a heavy hitter in the digital TV space.
“If you take away one thing, it's that 2015 is the year Hulu will break out,” Hopkins told the audience of advertisers. “We are investing significantly in content and technology. We have exclusive deals that set Hulu apart and set the stage for our future.”
The “Seinfeld” pact is one of Hulu's biggest acquisitions since launching in 2007. And it's just one of many streaming deals the streaming service has in play.
The company earlier this month unveiled a partnership with Time Warner's Turner Broadcasting that would give Hulu exclusive video-on-demand rights to previous episodes of shows on Cartoon Network and Adult Swim, along with select current and upcoming series from TNT and TBS.
Another big deal announced Wednesday was its pact with AMC Networks that will make Hulu the exclusive streaming home for all future shows AMC Studios will produce for AMC's portfolio of networks (AMC, WE tv, BBC America, Sundance TV and IFC), including “Walking Dead” spinoff “Fear the Walking Dead.”
Hulu has inked a slew of heavy-hitting licensing deals over the last 12 months, landing streaming rights to big shows such as “Empire” and “CSI,” and fuller deals with networks such as FX, Turner, Discovery, E! and Bravo.
The stream of acquisitions came on the heels of Hulu announcing it would make its subscription service available to Cablevision Systems — making the New York-based company the first pay-TV provider to do so. The deal includes the option to integrate Hulu as an app onto Cablevision set-top boxes.
Many on Wall Street feel Hulu could make similar pacts with other cable companies around the country, and in effect become the way viewers access their favorite television shows on demand.
For Hulu, which is co-owned by Comcast's NBCUniversal, Disney's ABC Television Group and 21st Century Fox's Fox Broadcasting Co., the announcements at least demonstrate its commitment to catch up with its competitors. And there's much catching up to do.
Hopkins boasted that subscriptions have risen 50% in the last year — but that translates to roughly 9 million subscribers under its $7.99-per-month plan, easily eclipsed by Netflix's 41.4 million U.S. subscribers.
David Bank, an analyst with RBC Capital Markets, said the pivot Hulu has taken makes its biggest statement by securing programming with wide appeal that could potentially bring in more subscribers, coupled with its technology to help advertisers reach hard to pin down the audience.
“Holistically, this puts Hulu in a different league than before,” Bank said. “‘Seinfeld' was the punctuation on it all. If we break it down, it's an overnight success that Mike Hopkins has been working on for 24 months.”
Something Hulu must work fast to do is establish its brand, particularly as Netflix's roster of critically praised originals such as “House of Cards” and “Orange Is the New Black” and Amazon's “Transparent” are showing awards muscle.
Hulu launched as a free service funded by advertising, enabling subscribers to catch up on last night's TV shows and access series popular decades ago. It established its “Plus” service in 2010 that offered viewers a fuller slate of content and the ability to watch on mobile devices and TV sets.
The company began dipping its toes into original programming in 2011, but this year it's taking a full-fledged dive in.
Equipped with $750 million that its co-owners ponied up two years ago, Hulu is making some big investments in original shows that it hopes will get attention. However, the service isn't in the same league as Netflix, which has a five-year budget of about $9 billion to deploy on new programs.
Still, for the streaming site that has been on and off the auction block and that pulled an initial public offering a few years back, the big push into original shows and picking up “Seinfeld” can help it make a statement.
At its presentation to advertisers, Hulu flaunted the all-star names attached to some of its upcoming original series. Abrams and Franco took the stage to discuss “11/22/63,” which is an adaptation of the Stephen King novel of the same name.
Jason Reitman and Zander Lehmann were also on hand to tout their family comedy “Casual”; Amy Poehler was on hand for “Difficult People,” alongside its stars Julie Klausner and Billy Eichner; and “Friday Night Lights” and “Parenthood” mastermind Jason Katims, who is executive producing family drama “The Way,” also made an appearance.
These are some of the big-named talent that Hulu should have been courting all along, said Macquarie Capital analyst Amy Yong, considering its deep-pocketed owners.
“With backing of NBC, Fox and Disney — not to mention their early-mover advantage in the original space — Hulu's success, or lack thereof, thus far is ironic,” Yong said. The joint ownership has provided Hulu with an extensive library of TV shows.
She added: “This year, in particular, every company is coming out with distribution product and new originals — new everything. It was time for them to step up their game. The fire has been lit.”
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