Graduation Year

Spring 2012

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Darren Filson

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© 2012 Brant B. Kersten

Abstract

Hulu, a video-on-demand service that is rapidly growing in popularity, has been particularly effective at adapting the traditional television experience to the interactive internet medium. According to the U.S. Digital Consumer Report, Hulu is second only to Netflix among video-on-demand services in terms of their share of online video time, which amount to 6.9% and 10.7% respectively. Note that this excludes YouTube, as their content is not as comparable to typical television programming. This growing trend is not going unnoticed by advertisers, as the year-over-year increase in advertising expenditures through this medium amounted to 24% according to the Global AdView Pulse (compared to 10.1% for television). However, the empowerment that Hulu's revolutionary advertising strategy provides its viewers is arguably more important than the diversion of advertising from television to the internet. In this paper I conduct an extensive, qualitative exploration of various theoretical components of advertising, their effects on consumer behavior and television markets, and how video-on-demand services like Hulu have the potential to shift the focus of the television industry from advertisers back to consumers as progressive technology provides them with more attractive, alternative sources of content.

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