Hulu plans to ride the success of its breakout hit 'Handmaid's Tale'

the handmaid's tale hulu

  • Hulu just nabbed its first Outstanding Drama Emmy nod for "The Handmaid's Tale"
  • The show is helping bring the streaming service more subscribers
  • Meanwhile, the company has big plans to innovate with ads within its just-launched live TV cable alternative subscription product

Hulu's breakout series "The Handmaid's Tale" has been nominated for multiple Emmy awards, including Outstanding Drama Series, giving the streaming company a chance to ride the success of its breakout hit.

It's not just the potential for an increase in subscribers. The critical acclaim for the show, Hulu's smart approach to marketing it, and the launch of Hulu's live pay TV cable alternative service in May, should open more doors for the company as it looks to compete with Netflix, Amazon and other platforms for original programming and steal ad budgets from traditional TV.

Hulu has been in the original programming business since 2011, but Handmaid's is far and away its buzziest production to date. The company has built out a solid stable of originals, including the J.J. Abram's—produced Stephen King adaptation "11/22/63" and the cult-centric "The Path," which stars former "Breaking Bad" star Aaron Paul.

But Hulu was looking for its version of Netflix's "House of Cards" for a while. Now, Hollywood agents say that the success of "Handmaid's"s should help Hulu get more meetings with top Hollywood producers in an increasingly crowded content sector.

Getting more phone calls

"Any time you have your show in the zeitgeist, it does a lot for you," said Craig Erwich, senior vice president, head of content at Hulu. "We did originals for two reasons. We wanted to define our brand and we want people to watch the shows. Originals become what you stand for, and we want to be in the television event business." 

Erwich noted the prestige TV shows often take 18 months to find their way on the air. So there's no immediate impact from Handmaid's — which has been streaming since April — success. 

"Can I point to a project we’ve gotten from this directly? No. But when you become a place where creative people are successful and you aim for excellence, you get phone calls. We’re selling that track record to creative [people], these shows are their precious babies. They want to know they’ll be supported."

One area Erwich said distinguishes Hulu versus other digital platforms is its willingness to get creative in the marketing of its shows. In the case of "Handmaid's," that included placing people dressed in the Handmaid's characters' red dress and white hat in public places in New York and Los Angeles.

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Meanwhile, Hulu has seen an uptick in subscribers since "Handmaid's "premiere, and many new subscribers quickly start watching the show as soon as they establish their accounts, according to people familiar with the matter.

Hulu, a joint venture between NBCUniversal, Disney and 21st Century Fox., said in May that it now reaches an audience of more than 47 million unique viewers across multiple platforms, and 32 million of these folks watch Hulu with ads. The ad-supported service carries a lower subscription fee.

And people who are into Hulu are really into Hulu. According to a recent comScore report, while Netflix accounted for 40% of recent TV streaming hours, Hulu came in at 14%. In households that only stream their TV content, Hulu generates 36.8 hours of streaming a month vs.s 35.6 for Netflix. 

Thus, it's unlikely that a single show like "Handmaid's" has suddenly brought a slew of advertisers to Hulu. And Hulu sells advertisers access to specific audiences rather than single show sponsorships.

But the series growing acclaim, coupled with Hulu's live TV initiative, all help build momentum in the ad community.

"It's less about just "Handmaid's Tale," said Steve Carbone, managing director and head of digital and analytics at the media buying firm Mediacom. "It's more just a positive story for Hulu. [Our clients] want more Hulu ads because of all the positive shows and audience that they drive."

The power and precision of digital ads--on TV

Peter Naylor, Hulu's senior vice president of advertising sales, says "Handmaid's" has opened more advertisers eyes about the quality of shows overall. "We’ve been doing originals for a while and now they are saying to us, 'what else do you have like that?'"

In terms of driving Hulu's ad business (the company does not disclose ad revenue), the bigger game changer may be Hulu's live TV service, since Hulu will get access to a few minutes per hour of national live TV to experiment with (just like YouTube can with its new pay-TV service and Amazon will as it streams NFL games this fall).

Since Hulu's content is typically delivered via the web, the company has long been able to experiment with more targeted and dynamic ads than typical broadcast TV. Soon, said Naylor, the plan is to bring these more advanced TV ad tactics to national live TV so that people will start seeing more personalized ads.

If that effort goes well, Naylor said it's not crazy to think that Hulu could start selling "OTT" ad space for other companies, even competitors. 

"It’s not lost on other publishers that we have a good sales force," he said. "If there was incoming interest for something like that, it’s not outside the realm of possibility."

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