A key element of Hulu Plus is that we are able to compensate content owners more per-user per-month than anyone else for the same body of content. We are able to do this because of the subscription fee, our unusually effective and market-leading advertising service, and our

It is clear to us that — because of the internet and the increased competition/innovation it brings — the future of TV is

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

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.

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.

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

audience, thanks to the internet medium. And content owners will have the opportunity to make higher financial

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

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.