Hulu Walks On Eggshells With Advertisers, Consumers

Does anyone still watch commercials? Not really, but advertisers aren't particularly worried, as they can still integrate products into TV shows.

As an example, Hulu's streaming video format is ad-supported, but the company recently introduced an ad-free subscription tier. For marketers, this means instead of buying commercial time they can pay to place their products directly into the TV show itself.

Ad Integration

Hulu's hit comedy "The Mindy Project" revolves around the life of Dr. Mindy Lahiri, played by Mindy Kaling. Her character is portrayed as highly educated, intelligent and successful in her business practice, but she has goofy side. In other words, she represents the kind of ideals and values with which a car company, such as Toyota Motor Corp (ADR) TM Lexus, would like to associate.

As if on cue, Kaling's character hits the road with her co-workers in a shiny Lexus RX SUV. It is also no coincidence that all the characters make use of Microsoft Corporation MSFT-branded devices, and Kaling's character is constantly glued to her Nokia Corp (ADR) NOK Lumia phone.

Related Link: Which Companies Are Winning The Internet/TV Advertising Wars?

"Given the economic realities of the fact that commercials are a dying business, brand integration is definitely going to be increasing in frequency," Ashwin Navin, chief executive of the analytics firm Samba TV told the LA Times.

Traditional cable companies are also following suit. The LA Times noted that "Saturday Night Live" plans to reduce its ad load by 30 percent next season. TNT is also exploring a move to add 10 minutes of program time, which could reduce its shows' ad load by as much as 50 percent.

"I think if you ask the consumer, what would you rather have: Would you rather sit through eight minutes of ads for 22 minutes of content or would you rather have product placement within the shows that didn't completely derail the plotline, I think they would take the brand integration 10/10," Navin also told the LA Times.