Great Movies

How Hulu Found a Subscriber Lure in Obscure Films


Toni Servillo in La Grande Bellezza (The Great Beauty)

Photograph by Gianni Fiorito/Punto e Virgola Press Office via AP Photo

Toni Servillo in La Grande Bellezza (The Great Beauty)

In the warring factions that dominate pay TV, big-budget original series have become the weapon of choice for almost every player, from HBO (TWX) to Netflix (NFLX) to Amazon (AMZN). Hulu has plenty of its own originals, but for the past three years it has battled for new subscribers with what some might consider an oddity: obscure art films that are, for the most part, known only to cinephiles.

The Criterion Collection, a New York video distributor that has also restored the technical quality of much of its aged library, says it sells films that are “the defining moments of cinema” from a range of acclaimed directors such as Akira Kurosawa, Luis Buñuel, Charlie Chaplin, Federico Fellini, Jean-Luc Godard, and François Truffaut.

In early 2011, Hulu and Criterion reached an agreement to make some 800 titles from the collection available online. The deal also gave Hulu exclusive streaming rights to The Great Beauty, which won the Oscar last month for best foreign language film. They renewed the deal this week for those films to remain available to Hulu Plus subscribers, who pay $7.99 per month. In 2013, Hulu passed 5 million subscribers, with annual revenue reaching $1 billion—numbers that persuaded its owners, Walt Disney (DIS), Comcast (CMCSA), and 21st Century Fox (FOXA), last summer to call off an auction and retain the video service.

Hulu and Criterion both say they are pleased with how the audience of the collection has grown over time, with Hulu visitors to the Criterion lineup rising 25 percent from 2012 to 2013 and the amount of streaming of the films growing by almost 50 percent. And while it’s a bit of a bizarre offering to find on the same platform where, after all, the bawdy cartoon Family Guy typically ranks as most popular, Hulu officials say Criterion’s library draws a separate audience of cinéastes and casual viewers who may want to sample a particular film or director they’ve heard of but don’t know much about. (Wim Wenders’s phenomenal Wings of Desire, for example.) Beyond art house films, Hulu has also added Japanese anime and a large collection of Korean dramas and comedies, and it’s forged exclusive agreements with the BBC and other British programmers.

Criterion President Peter Becker said the company had spoken with several other video services about streaming its films, but Hulu was the best fit. In a 2011 blog post announcing the original deal, Becker called Hulu’s user experience “simple, elegant, and focused on the content.” “The reason we love working with Hulu is that they’ve really helped to build their platform around our brand,” Becker says. “For us, it’s a huge number of viewers who are there that we can reach directly.”

Bachman is an associate editor for Businessweek.com.

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