Charlie Rose Talks to Hulu CEO Jason Kilar

The chief of the online video-streaming powerhouse talks about the changing tastes—and enormous appetites—of the viewing audience
"Four or five hours a day is what Americans spend consuming video. So this is a big deal" Photograph by Haruyoshi Yamaguchi/Bloomberg

You’ve suggested that a tectonic shift is about to take place. Explain.
To me, it’s very similar to the invention of television, where you had movie houses and a very robust movie industry. Initially, the television was seen as the devil incarnate by people that worked in the content industry. Now over time it turned out that that was one of the best things that ever could have happened to a content creator. I think the Internet is no different. In fact, the Internet is going to have a bigger impact on content creators than the television ever had. The reason why that’s the case is that suddenly you’re able to tell stories 24/7 in the home, out of the home, in every room of the home. A television screen can be in your pocket through a smartphone.
So where are we in terms of pay TV?
The pay TV industry today is a very healthy business. It’s in a great position. You pay for Netflix. You pay for HBO. You pay for VUDU. And you pay for Hulu Plus. And really, the only thing that differentiates all those services is what you get in return for a given price. There’s the big bundle where you pay about $85 and get hundreds of television channels, primarily in the living room. And there’s other services where you pay $7 or $8 or $9, and you get another subset of programming. The entire industry is going to be very healthy for a long time.
How about content creators?
It’s a great time to be a content creator.
And that’s exactly what you’re doing. You’ve become not only a distributor but also a content creator.
Just a couple of weeks ago, we launched our first original scripted series, called Battleground. We did it for two reasons. One is we thought it was a story that needed to be told—it’s a great story by J.D. Walsh and his team. And we also thought it would be a great differentiation for a service like Hulu.
For a lot of your site’s content, consumers can see it elsewhere. With my show, for instance, you can watch it on my site or at Hulu or other places. How do you think people choose where to go?
Ultimately, it’s ease of use and it’s value, which is this equation that people think about in their heads and in their hearts. And it’s a function of a lot of different things: How easy is it to use, is it well designed, is the price right, do I have affinity for the brand? And these are all things that the Hulu team sweats over every day in terms of is our search engine low-latency, do we aggregate hundreds and hundreds of content providers, do we do it in a delightful way?
How will the winners be determined?
It’s just going to come down to who delivers the most value for consumers. And by the way, I think there’s going to be a number of winners. This is an immense, immense industry.
How do you measure it? Just how big is it?
What I think about is what people spend their time on this planet doing. So No. 1 is sleep, No. 2 is work, and No. 3 is sight, sound, and motion video consumption. Basically, four to five hours a day is what Americans spend consuming video. So this is a big deal. This is a very important way that people spend their time, their leisure time. And I think that when you talk about markets that are that large—and they’re global—they’re going to attract a lot of folks.
You now have something called Hulu Ad Swap. What is it?
Hulu Ad Swap is something that I’m a huge fan of because in the history of video advertising, there’s been one innovation: the introduction of color. We introduced this thing which rivals the inventiveness of color. Imagine you’re watching 30 Rock and an ad comes on, but you don’t like it. With Hulu Ad Swap, you can actually click the button and trade out the ad. So for the first time ever, a consumer is in control of their ad experience. For us, it’s a big win because users are able to take control of what they see. And advertisers win in a big way because it’s more relevant.
Tell me what you see as the big threat to your business.
I worry most about our culture, and I don’t say that lightly. I think that great businesses ultimately are great cultures, and when we started and we got Hulu going, together, both NBCUniversal and News Corp. and then ultimately Disney came in as well, the thing that the team and the board did together was to think a lot about what’s the ideal culture for this next-generation technology and media company, and that’s this very precarious, fragile thing.

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