With the above dynamics in mind, we believe that there is going to be tremendous near-term innovation in the pay TV distribution business. The internet has made it possible for new entrants to innovate quickly and materially. Consumers will have more choice and convenience going forward. This competition will drive prices and margins down in pay TV... See more

Consumers are demonstrating that they are the greatest marketing force a good television show or movie could ever have, given the powerful social media tools at consumers’ disposal.

* Traditional TV has too many ads. Users have demonstrated that they will go to great lengths to avoid the advertising load that traditional TV places upon them. Setting aside sports and other live event programming, consumers are increasingly moving to on-demand viewing, in part because of the lighter ad load (achieved via ad-skipping DVRs,

The above trends are a reality and we believe the wise move is to find ways to exploit these new trends and leverage them to build great businesses. History has shown that incumbents tend to fight trends that challenge established ways and, in the process, lose focus on what matters most: customers. Hulu is not burdened by that legacy.

returns, which will be a function of disciplined per-user per-month licensing strategies, along with the benefits that

more content. We also expect to see lower consumer prices, which will be a function of a marked increase in

distribution competition. Advertisers will be able to efficiently and effectively target their messages to just their desired

Distributors will certainly play a role in the future of TV, but we believe that three potent forces will be far more powerful in shaping that future: consumers, advertisers and content owners.

* Consumers want TV to be more convenient for them. People want programs to start at a time that is convenient for their schedules, not at a time dictated to them. Consumption of original TV episodes will eventually mirror theatrical movie attendance: big opening Friday nights, but more consumption will be in the days and weeks afterward. Consumers... See more