A fascinating discussion about ad innovation, the rise of digital, the recent research team integrations at Disney (in the midst of the pandemic, streaming wars, Disney restructure, Nielsen saga and so much more) and the future of television.

Transcript:

Duane:[00:00:00] Legends of Media Research is a podcast series featuring interviews with the media industry’s leading researchers, where we go behind the scenes sharing stories from their greatest achievements and challenges. Brought to you by MediaScience, the leader in media and advertising innovation research. Stay tuned at the end of the podcast for more information about MediaScience, but for now, I’m your host, MediaScience CEO, Dr. Duane Varan.

Welcome to another exciting episode of Legends of Media Research. We’ve got a great show for you today. Today I’m interviewing Julie DeTraglia, Julie’s EVP and Head of Research across Disney and Hulu. That includes [chuckles] a lot of properties. It includes ABC, ESPN, Disney+, Hulu, and of course a whole bunch of cable [00:01:00] channels. So it’s gonna be an exciting journey. Julie, thanks again for joining us today here on Legends of Media Research.

Julie: Thank you very much. I don’t feel like I’ve attained Legend status, but I’m really grateful to be included. I’ve listened to some of the other podcasts, some of whom, you know, I know most of them, so it’s been, it’s really exciting to be included, so thank you.

Duane: Your humility. It’s one of those things that you never know when you become a Legend. [laughter] So, welcome to the show. So, Julie, how did you –let’s just dive right in. How did you get started in this industry?

Julie: Great question. So I finished college. I won’t give a date. [laughter] But I thought I wanted to be in the movie business, so I started looking for jobs in the movie business and I ended up in New York City working for a film producer.

It was sort of short lived. I found pretty quickly that the movie business moves very slowly and I knew I loved television and so I said, let me give this a try, and I did what you did back then, which is open The New York Times and [00:02:00] looked for job listings. And I found a listing at CBS and I said, ‘well, I know CBS, I watched that show’.

I applied for the listing and I got the job and I worked in Affiliate Relations, which you know, still exists today. It was very different business back then though, you know, it was broadcast networks and affiliates were their only distribution, you know, point at the time, and cable obviously.

But it was the stations that, you know, took on most of the distribution points for the network. So it turned out to be a really great role because I learned a lot about the television business. It was sort of like the place from which all of the communication spread out. So we did a lot of work on… anything that happened at the network sort of passed through our division, whether it was PR or scheduling or lineups.

So it all kind of came through us. So I got a great baseline for how TV works. And I was in that job for a couple years and I knew at some point I was gonna have to figure out [00:03:00] like, ‘which of these things that I’ve learned do I wanna try to go and specialize in?’ And what happened was, at that time while I was working there, David Letterman moved from NBC over to CBS to do the late show, and he took the 11:30 time slot at CBS.

Which was previously not a time slot that CBS programmed. It was local, so the stations could put reruns of Cheers, local news, whatever it was they wanted in there. So they had to go convince all these stations to run Letterman in pattern. That’s how you got the rating that you needed.

And stations obviously got some of the ad inventory in there. The local inventory, the network got inventory and in order to kind of sell it through, there was a team that did research. So they used the ratings to tell the story of ‘here’s what rating we think Letterman’s gonna do. Here’s what you’re getting for Cheers. Here’s how much money we think you can make. Here’s the split’, etcetera.

And so it was the first time I really understood like, ‘oh, you could take this data and tell a story out of it and [00:04:00] convince someone to make a business decision’ and allow, you know, a team to make a business decision. And so I got more interested in it. There was a big research team at CBS. In affiliate relations we had just like a couple of guys that did this.

So I sat with them, learned how they did it, got to know how it worked, and I was like, ‘oh, I kind of like this!’ So I decided I would give that a try. And again, I went back to the old New York Times and applied for a job and I ended up for the next few years, bouncing around a lot.

I almost had like a job a year and back then it was like that was the only way you could really grow and even, you know, make more money, get better titles. So I worked mostly in syndication. And I can’t even really remember what order it was in, [chuckles] but I worked at MGM, I worked at Paramount. I worked at a company called World Vision. All mostly on the ad sales side, but also the station sales side, so the content side and then the ad sales side.

And I did research in each of those, and it was using that data to tell the story about the programs we were selling, and then of course the, you know, [00:05:00] the audiences that were available for advertisers to reach. So I kind of bounced around a bit and, but I really liked it. I kind of found a thing that interested me and I loved television.

Syndication was a much different and a very big business back then. I mean, there were a lot of big shows, and I’ve told this story before, but when I worked at World Vision, we had Judge Judy and you know, she’s still around. She used to call every week to get her numbers and the phones would just ring through, like she would call one number. If that person wasn’t there, it would ring to another phone or ring to another phone. So it was always very scary to get the call from Judy and she was like, ‘what are my numbers this week?’ And they were always huge. It went up every week. So I did that for a while and then there was an acquisition and so I needed to go figure out something else.

So for a couple years in there, I did the great internet experiment in the late nineties when everybody was doing websites. I worked at a couple startups. One of them, interestingly enough, was a video streaming startup called Micro Cast, and I went there with some people that [00:06:00] I had worked with at World Vision.

When World Vision kind of dissolved, it was acquired. Everybody sort of scattered around and people landed in different places. And our head of sales at that time landed at this place called Micro cast and said, ‘come do this’. And you know, I didn’t really know what it was gonna turn into. It seemed sort of an interesting prospect because what they did was they obtained, like, proprietary pipeline through which to serve video, but the problem was bandwidth.

But the problem was that last mile, people didn’t have high speed connections to their home at that point. What was streaming that? What was popular in streaming then was some sporting events and then the Victoria’s Secret Fashion Show. Those were like the big streaming events of the day. So I went and it was really interesting.

It was the first time I really worked at what I would call a startup. Pretty well funded at first, but the money kind of ran out over time. And eventually I was laid off and then the company went bankrupt. It was a really fun experience. It was a lot of people who came from more traditional TV media, and we had to go figure out how to [00:07:00] build something, you know, like how are we getting content?

How are we monetizing that content? How are we measuring that content? Like what are the metrics? So it was a really interesting time, but once that was done and the internet stuff was sort of, you know, falling apart, I was like, ‘it’s time to get back into TV’. And eventually that led me to NBC, where I spent the bulk of my career. I was there for about 15 years.

So those were the very beginnings and I was always in TV research at NBC until w e launched the great digital experiment there and decided to go make some money off of what was then just websites. And it kind of, you know, evolved from there.
[music]

Duane: And I think that’s one of the things about your career that’s so interesting. I mean, you know, once your career was kind of like fully in gear and in motion with your arrival at NBC and onward afterwards with Hulu after that. You’ve really seen, in the broadcast universe, the rise of digital.

I mean, even at NBC you were [00:08:00] really– they’re on the ground floor when digital was a newborn. And you know, I would imagine that those early days as a business unit, you were seen as [laughs] a little bit insignificant in the larger ecosystem, you know, and you’ve seen this rise of digital from these kind of like humble beginnings to, you know, to what it’s become today, which is now this dominant kind of like future really, which where everyone’s looking.

So maybe you could talk to us a little bit about what you saw in that kind of like, transition from those early beginnings to digital being, you know, the star attraction.

Julie: Yeah. It was really an interesting time. Like I said, I started NBC, it was about 2001 and I worked on PACS. That was the job that I got when I started there. So PACS was NBC’s very first acquisition. It was a broadcast network, family friendly. We did like a lot of off-network stuff like Touched by an Angel, but then some original programming. We had a show with Billy Ray Cyrus.

It’s actually pretty successful. It’s still around. I mean, it’s [00:09:00] now it’s sort of morphed into what’s called Ion right now. So that was my entrée into NBC and that was a lot of fun because it was also like, almost like an ancillary business. So they were like, ‘yeah, go do your thing, have fun’, and it was great and I still am friends with a lot of the people that I worked with on that business.

And then I had an opportunity in, I guess it was like the early 2000, when NBC bought “iVillage” and decided to kind of get into the digital business. It was a really smart decision thinking about it now because iVillage brought with it infrastructure, knowledge, like just a baseline understanding of how digital works, and it was very hard at that point.

Everybody needed to do digital, but they didn’t know how, it was a TV business. So bringing that intelligence in was a big advantage. We had already at that time, begun to sell, make money off of the websites, and that was what we had, websites, nbc.com, bravotv.com, et cetera, and began to sell inventory on [00:10:00] them.

So, because I had done a little bit of online stuff, I was like, ‘I can do this, like, let me–’, I needed to make a change, you know, let me just try this and went and talked to my old boss, Alan Wurtzel, who you interviewed here. And I said, you know, I can help with this. And he was like, great, come on over and do that.

So, I had, it was me and like one other person. I think we grew to two, you know, [laughs] eventually, and then we just kind of had to go figure out, what are we selling? How are we selling it? How are we programming? What do consumers want out of this? And it felt like, again, like a startup in the comfort of a large media company.

Like it wasn’t going anywhere. And most of the time they didn’t really care about it. They were like, ‘oh, websites, that’s great’. All the money, all the concentration was, you know, happening on the TV site. Totally got it. But it was fun for us. I mean, we really got to build something new. And then video came along and it was actually, ABC was the first network to start streaming primetime content through a [00:11:00] computer, you know, like next day content.

And NBC followed probably like six months later. And again, we had all this sort of like, infrastructure of ad serving from iVillage and it began to, you know, to turn out. It became something. Eventually we began to see that a lot of our shows, particularly things like The Office Parks and Rec, 30 Rock, they were all gaining, you know, more and more views online and it wasn’t at the point where it was like concerning to the network yet, but we had to do a lot of work to make sure that everybody was cool with the fact that we weren’t cannibalizing the rating. Like we did a lot of research to make sure that it was incremental viewing that was at people who don’t have a TV or whatever it was.

And it was right around that time also when Hulu was born. And that of course was NBC and Fox as a joint venture to start. Disney joined in about a year later, but my team was involved in some of that research around that launch, and it was [00:12:00] really, it launched as a hedge, right? It was people we knew were watching a lot of our content on YouTube.

Some of it was controlled, some of it was not. Saturday Night Live was getting a lot of traction with all of the digital clips that were airing there, running there on YouTube and, you know, it was like almost a double edged sword because we didn’t, couldn’t monetize that content, but it was promotion and it was getting attention for the show and building audiences and building, you know, the brand for those shows.

But there was this notion that like, why don’t we launch something where we can have video there and we can sort of own that ecosystem? So we did some work when Hulu launched, and of course, NBC sold inventory in their content, and Hulu still does to this day. And so I had like sort of ancillary experience with Hulu and it was part of our sort of overall digital portfolio.

And of course a lot of stuff changed at NBC. Bought Universal, and then a few years later, Comcast came in, bought NBC [00:13:00] Universal, went through all of the things that an acquisition involves, and the time came for me to try something different. I mean, I loved my time at NBC Universal. It was really where I grew up and I got to work on many Olympics.

I got to work on– I worked on sports, I worked on broadcast. Olympics was another really interesting place where digital– we’ve watched it grow. Because it only existed for two weeks every couple of years. And we started out with a website and then there were apps, and then every Olympics we would see consumption of online video and then mobile video grow and grow and grow.

And it was always a sort of like side project, but it kept growing and it became, you know, a big part of the viewing and also a bigger chunk of the revenue. And that continues to happen in this day. Obviously NBC’s streaming everything on Peacock right now, which tells you, you know, it’s just that streaming is a critical part of the way that people view.

So when the Hulu [00:14:00] opportunity came along, it was my friend Peter Naylor, who I had worked with at NBC, had gone over to run sales there. And he reached out and we talked and he said famously, you know, ‘come on over, the grass is greener’ [laughs], and he was right and I did. It was a– it will always be like a big highlight of my career because I was just there.

I started it in 2016 when we were at about 12 million subs, I think when I started, and now we’re, you know, well over 40 million. And we had just– like the live service was just about in planning phases. It didn’t launch for about another year, so it was underway and we grew just exponentially. And it wasn’t only like we, I was there during a time of like consumers discovering streaming in a huge way, but advertisers also.

And that just gave us like a landscape for innovation and it was really what was core to the Hulu mission, was ‘let’s reinvent TV’. [00:15:00] Make it an experience that people really like. And of course we did a lot of work with you, Duane, on a lot of that at innovation work. But that was, it was just really exciting.

It was a lot of fun and kind of like a lightning in a bottle moment. And then Handmaid’s Tale happened and because, you know, people– Netflix was already big when I got there, Amazon Prime video was big. We were just this little sort of like engine that could, and it really sort of just, we caught this moment in time when consumers were coming and marketers were coming and content was taking off and then the live product launched and everything was sort of growing. All at once.

[music]

Duane: You made reference to the ad innovation. I think, you know, for me, one of Hulu’s most impressive achievements in the industry has really been the pioneering work that, you know, Hulu has done to lead ad innovation. I think that Hulu had a clarity [00:16:00] about its mission. I mean, it was always, it always had this strange ownership structure, which kind of like, you know, had held it back until somebody had majority holding in it, you know, in this case Disney.

But throughout that period, at least on the team side, there was never that kind of fear of cannibalization or the kind of dialogue that was there for the broadcast networks was so much more complicated in terms of how do we move forward with that innovation without kind of like disrupting our existing business revenue, things like that.

But Hulu from, you know, from the get go, from the very beginning, it was like that charge of reinventing television also meant reinventing television advertising. And there was a fearlessness, you know, a willingness to kinda like try and do things that pioneered all these, you know, these new app models.

So maybe you could talk to us a little bit about what it was like coming into this environment [00:17:00] where, you know, you had this charge for reinventing, not just TV, but TV advertising.

Julie: Yeah, and I mean, I can’t take credit for what had been there. It was really foundational to the launch of the product itself.

And I actually will say, I will give credit to the networks ABC, NBC, Fox when they launched their own video players, they did have to create a new ad model and some of that exists today. There was a thing called at NBC, we called it a ‘branded canvas’. You basically, one advertiser owned the whole episode and you got like the surrounding UI as part of it.

You could build in like interactivity in the– it was all over the website. It was a little bit easier to do on website and Hulu launched with a lot of it. Those were the founders. I mean, they really, that was part of the foundational part of Hulu. You had that kind of flexibility because you were working in a digital space and, you know, it was a time when we understood that people got streaming services for choice and control, and so they wanted that out of the ad [00:18:00] experience.

That’s what a lot of those foundational products were. We had ones, you know, you could choose which creative you wanted to see, and you could click, they were clickable, you know, and you could choose to see a longer ad up front and then not have any breaks for the rest of the show you were watching.

There was interactivity. There was like, you know, games you could play in the ad units, things like that. And that was all a lot easier to do in a sort of web environment. And then phones came along. And then the most, you know, really fast incremental change that happened was technology that enabled you to watch Hulu and Netflix and Amazon Prime on a television set, which is the way that people had been watching television for decades.

And that change happened quickly, as soon as those devices, you know, became available and were more penetrated in the marketplace, people got them, they streamed TV on a TV set, and so we had to, you know, reset. There was a lot of products that translated over, there was some that took a while, [00:19:00] like interactivity in the living room happened a few years ago.

That was one of, you know, with other partners and vendors to do that. But we did a lot of consumer work to sort of understand why are people getting Hulu in the first place when no ad Hulu launched? There was a lot of fear that ran through, and this predates me, that ran through the ad sales ceiling, we’re gonna be gone, you know?

But as it turns out, people understand, you know, the way this works, they understand that I’ll pay less to have ads. And we talk to a lot of people who are like, ‘I don’t mind ads. I like ads’. Some people even love ads. You know, they’re like, they understand how the trade off works and they’re like, ‘I’m getting this content for less’.

And we sort of had an unwritten contract with our subscribers that the ad experience you’re gonna get is gonna be less, you know, fewer ads, fewer ad pods, more relevant to you, and we’re gonna use whatever information we have to try to give you a more enjoyable ad experience. So we had to go about and do that.

[00:20:00] And that meant, you know, understanding why consumers got Hulu in the first place, what they expected out of that ad experience. And then we really dove into the data, a lot, to understand how people were watching and using the service. The two, I would say, you know, most famous ones, I guess, that have been replicated by all the other services that have launched since then are the ‘pause ad’, which was really not all that, you know, innovative.

I mean, it’s basically like, it’s a display unit on a screen. But it’s unique because what we saw was that, because our ad breaks were shorter, people didn’t have the time to take a break when they were watching TV, so they pause, and then you own that real estate on the screen. So we’re like, ‘why aren’t we leveraging this?’

And we did a lot of work to make sure we weren’t doing something that a consumer didn’t want. They were okay with the ad unit on the screen. They didn’t want sound, they didn’t want video, like, and we tested all of that. Those were the– they paused for a reason. It was to stop the video and stop the sound.

So, you know, [00:21:00] give me a static unit and it can be animated or whatever. But that was what they were okay with, and we tested it in a number of ways. And it’s, you know, still around to this day and it’s been really successful. And then the other one is the ‘binge unit’. Which again, came out of the data.

We knew people were binging content. We all do it, you know, as human beings and viewers, and we wanted to try to create an experience that was– an ad experience that was commensurate with that viewing experience. That recognized that, ‘look, we know you’re in this for the long haul. We can tell from the data you’ve been watching the show for three nights in a row. Here you are again. You know, let’s give you this experience upfront that’s relevant to that– contextually relevant to the way that you’re watching’.

And it surprised and delighted your viewers and it keeps them in that ecosystem. We want them there. So it really became like a mantra for us and it became an expectation of the marketplace that we would bring them something that was new and different, and a lot of it was built out of the things that had already been developed at all these other media companies, which [00:22:00] is developing custom integrated commercials.

That type of integration, those partnerships have been happening for a long time. Hulu got into it a little bit later, and one of the things we found was that when you combined, you know, the advertising message with the context and the content, that’s when things like really fired on all cylinders.

And you know, we had a few examples of those where– we did with something with ViScene. Where it was like, ‘you’re binging a lot, your eyes are tired from watching too much TV, use ViScene’. That was resonated really powerfully. And then, just one last example, the other one that we did a lot of work on, and we might have done some of this with you doing was was sequential advertising.

So people are watching TV ‘cause it tells a story and if an advertiser is willing to make creative that is sequential and tells a story, that’s also really engaging for a viewer because they hang on the next ad. So we did a lot of that and still do a lot of that today. So we continue to do all this, [00:23:00] to keep innovating.

Obviously that’s spread across. All of Disney and all the inventory that exists there. And there’s so much more opportunity because of all the IP that’s there, all the other products and services that we have, and the creative that departments that come with Disney, the people that have been, you know, making magic for all this time.

All that can be, you know, leveraged to create a whole brand new experience.

[music]

Duane: What we’ve always loved in our collaboration with you on the research side, it’s not just the innovation. I mean, the innovation’s always impressive, but it’s also that commitment to get to the win-win proposition. You know, the win for the network, but also the win for the consumer, for the viewer.

And that’s just so refreshing because you’ve gotta say that that’s the path to the future. The path to the future is to find win-win propositions. Not to figure out just how to kind of like sneak in under the radar so to speak. So, we’ve loved this.

Julie: Yeah. You know, Hulu was always focused from the beginning on building this for [00:24:00] for the viewer.

And that became translated into viewer-first advertising as well. And I don’t think that had been really contemplated before. You know, we were always viewer-first, but it was like, let’s make the ad experience viewer-first also. And in a lot of ways there’s, you know, there was always going to be interruptive ads, like that’s just sort of how the machine works.

But we did make a considered effort to try to build and make goals around our revenue for what’s non-traditional, non-disruptive, more relevant. Obviously the data that comes with streaming allows you to deliver more relevant advertising to people based on what they’ve watched, what they bought, what they’re in the market for, all with a lot of third party data and first party data. So that just presents a big experience and that has really changed the entire, everyone’s doing that. That’s really changed the entire television ecosystem. Much more data-driven decisions being made in the advertising space.

Duane: You know, one of my favorite research projects with [00:25:00] Hulu, Julie, I think it was before your time, but it was a show that was called Farmed and Dangerous.

And it was pretty funny. It was a show with this, that was all about, you know, like natural organic farming or whatever. And there’s this evil farm where they feed their cows, like petroleum product produced feed or whatever. And as a result, if a mobile phone rang next to a cow, the cow would explode.

Anywa, what was amazing about this particular show, and the reason we love this research so much is that Chipotle, which funded and sponsored the show and co-produced it, was never mentioned anywhere in any of the shows. There was nothing that said ‘brought to you by Chipotle’ or anything, but it was just giving the message that Chipotle’s values, I guess, are built around.

And what we discovered was that the impact of that show on Chipotle was greater than the impact of any advertising we had ever seen. [laughs] But it was again, that spirit of…

Julie: It sounds familiar. It [00:26:00] definitely predates me, but that does sound familiar.

Duane: It’s that spirit of innovation again, that willingness to kind of like, you know, to try new things.

[music]

Now one of those areas also where Hulu’s done a lot of work and a lot of really interesting research, you know, including work with us,, is in the whole brand integration space. Maybe you could talk a little bit about, you know, what brand integrations were like for you when in your Hulu role.

Julie: Yeah, it was nascent, right? I mean, they had started again, like a lot of it predated me, but it was sort of a new avenue for revenue that we– everybody else was doing it. We were getting started with it, and you know, it requires having original content and that was really all ramping up.

We were still kind of really in the game on that. We did some stuff with The Mindy Project that was really, really great. We did something with McDonald’s that was– she was like, still is I think maybe, a big McDonald’s fan. So we had integrated McDonald’s into that show and we [00:27:00] did a lot of testing on everything and they’re all just, again, I think they’re successful no matter where they are, but when you find an integration that works really organically with the show and that the creators are, you know, really aligned with doing, that’s when– and have fun with it, that’s when it’s the most successful.

And we tried to make them sort of more focused on– like catching the streaming part of it as well and the binging part of it. And we always accompanied all those with research because we knew that that’s how you sell more of them. And again, advertisers wanted us to come to them and show them case studies, you know, what’s worked really well.

So yeah, we really got more into that part of the business. As you know, probably like in the couple of years when I started.

Duane: You know, just for the benefit of the audience, so they understand what the research looks like: so the way that we would do this is we would take the integration as it aired and we would create an alternative version where we digitally rotoscoped out the brand and sometimes [00:28:00] replaced it with a competing brand even.

What always amazes me in this work is how real it looks. The production team, our production team, when they do this, they get the shadows, the reflections, the lights. I mean, when you look at the rotoscope version, it looks absolutely natural. And then you’re able to test both the effect of the integration and the content, but also on the impact on the adjoining ads.

And that’s where we found, you know, the impact is even greater. The priming effect that it has and the salience of the brand that, you know, when it occurs in the ad. Just a fantastic new business model really, in terms of going into the future. I mean, it’s such a golden opportunity for a brand really, in terms of helping reinforce the position of the brand and in the consumer psyche.

Julie: Exactly

[music]

Duane: Of course, Hulu became majority owned by Disney. And you made this huge transition, Julie, into your new current role, in this leadership role across [00:29:00] research for ESPN. That was a really big integration. I mean, for many, many decades ESPN was always a sacred cow that was always separate from the rest of the Disney family, and I mean, just this massive integration, maybe you could– and happening in strange times as well.

Maybe you could talk to us a little bit about your transition into the new role and the larger kind of like, if you will, strategy within Disney in terms of this major transition.

Julie: Yeah, so it was about two years ago, almost exactly this time when… For Hulu and for everybody, everything was happening at once.

So our former CEO, Randy Freer, left the company and the integration of Hulu into Disney began like in earnest. And we all knew like this was coming, and some of it had started to happen actually before that. Like our content team was already reporting into the studios. And by the way, this was Disney coming off of just having done the Fox acquisition. So they were just [00:30:00] in constant integration and change mode.

[Duane laughs]

And we just sort of piled on, and we just were kind of shocked by how everything they had gotten done and now like, we gotta get this part done too. So basically each of the divisions within Hulu began to kind of slot into the respective Disney businesses as well.
So ad sales went into ad sales, legal went into legal, product teams came together, technology teams began to like– those plans began to materialize at the same time that we were suddenly all.working from home remotely and making that big adjustment and– it wasn’t just working from home, it was quarantining at home.

This was like the peak of this scary pandemic going on. So it was a really difficult time managing that change for everybody, not just for Hulu, but that the work stuff was happening at the same time as all of that, you know, pandemic stuff.

And then from a research perspective, it was actually [00:31:00] pretty interesting time because people were stuck at home and they were watching a ton of TV, so we had a lot to talk about. At that time we were still lots of separate teams trying to begin to understand how we were working together, and we were just observing what was going on. And I was still specifically on Hulu at that point.

So we did a lot of check-ins with our customers to understand ‘how was your behavior changed’. And we had begun this work actually early in 2019 because we knew ‘the streaming wars’, as the press was calling it, were coming. Disney+ obviously launched late in 2019, Apple TV+ launched around the same time, HBO Max was coming, Peacock was coming, Quibi was coming.

Like all this stuff was coming. Big streaming services from big media companies with a lot of content and the ability to create great original content. So we were preparing for that at Hulu. We had done a lot of work to understand the decision-making process that people– the considerations they made when they got a streaming service and then everything got [00:32:00] tossed in the air and everything got really accelerated.

And we saw all TV viewership grow. In April– March, and April and May, obviously live sports were all shutting down one by one, you know, in March of that year. But ESPN got really smart about it and had to rethink like the way they did the NFL draft, put Last Dance, you know, the Michael Jordan docu-series out, and it was a huge, huge success.

People were obviously hungry for sports content and still wanted to talk about sports and experience sports, and so that worked really well. Disney and ABC did a lot of– there were some singalongs, you know, family friendly, everybody was stuck with their, you know, keep your kids entertained. [Duane laughs] It was really interesting and really it was like a public service, you know, that I felt the company was doing to give people stuff to do.

And then of course, for the streaming services, there was a ton of content for people to discover and we saw all kinds of really interesting behaviors happening on Hulu. [00:33:00] Anything from– we had some big movies that we released at the time. We had a lot of nostalgia viewing, people going to watch like Golden Girls.

Comedy, people wanted comedies because they didn’t like what was happening in the world, but people were also watching like The Handmaid’s Tale, which was interesting. You know, dystopian drama at a time when the world felt sort of dystopian itself. And people also wanted long television experiences because they seemed like we were gonna be locked up for a little while.

So we used to see people who were like, ‘I don’t wanna commit all this time to watching this show’. We were asking people in our surveys and we were seeing it in our data that they were like settling in, like, ‘I’ll start Lost now, I’ll start, Friday Night Lights’. Like all these Law & Order, you know, there’s like a lot of those.

So they were kind of settling in for that longer term experience. So I would say, you know, during that time what we were seeing was that there were interruptions happening and then there were real disruptions happening. [00:34:00] Sports is a really good example of an interruption because it literally stopped, right?

It was interrupted, and when it came back, it came back differently and, you know, it was no people, no crowds, weird crowd noises, lots of COVID concerns. People were concerned for athletes, like we were asking all those questions. So it was like a weird time when they– and also everything outta season.

Like it was just like not normal times for sports and now, that hopefully, you know, as things continue to open up, they’re back and they’re back in a big way. And sports are doing really well. People are like almost really grateful to have them back. And it feels like a more normal viewing experience for everybody.

And they can participate as fans and like go to games again and watch your kids play sports. Like all of that feeds that. So that felt like an interruption. And then you have the disruption, which you could talk about, you know, movies were disrupted, that business will continue to evolve. Although, you know, certainly people are– [00:35:00] love a theater experience and are going back to theaters.

But they also like having ’em in their homes, you know, and then certainly television. All of television really, really was disrupted, probably never to return. And again, it was happening anyway. Because of the streaming wars and the wars collided with the pandemic and everything accelerated. We talk about this a lot that for a very long time there were three big streaming services.

I mean, there’s hundreds of streaming services, but there was, you know, Prime Video, Netflix, Hulu, and we had to kind of educate the consumer on the value proposition. You know what you’ve got, okay, you pay a monthly fee, you get all this content, you need a device, you gotta go get it. You can turn it on and off.

But that consumer awareness and acceptance took a long time. Now people totally get it. They’ve got the TV that allows ’em to do it, or the device that allows ’em to do it. They understand I gotta download something, I gotta sign up, I gotta pay a monthly fee. And what I get in return is a ton of content, and there’s lots of choices [00:36:00] and tiers and decisions that have to be made.

But the value proposition for streaming is well known for consumers, and now they’re just in a seat of great power and enjoyment because everybody’s got one. And there’s a lot of really great content. And the other thing that obviously was interrupted was production for all these shows. So we had this like period where you couldn’t release new content, you know, everything sort of production stopped.

And now, and going forward, I think for the next few years, everybody’s studios were ramping up anyway, and now there was just this backlog that’s caught up. So if you’re a TV lover, it’s a great, great time to be alive.

[music]

Duane: And for you, personally, this must have been so interesting. I mean, you stepped into this role, into this new role, heading up research across so many exciting teams and groups across this Disney family. I mean, here you had the disruption with [00:37:00] COVID, you had the integration with Disney, you had the streaming wars [laughs].
I mean, that’s a lot going on into this new gig that you’re stepping into.

Julie: Yeah, and you know, it was– there was a lot happening again, obviously the economy everywhere was hit, because of the pandemic, and for Disney the parks closed, people weren’t going to movie theaters.

The company really did a fast and pretty remarkable job changing the business. And obviously a CEO changed as well, you know, that was all happening at the same time and really like rose to the occasion of very quickly determining what the company needed to do to be successful. And it was changing in a massive restructure that happened that fall.

So again, I was at that time still working on Hulu, but things were beginning to evolve. We were all kinda working together. I mean, this was a–it’s a big company. We did a lot of things where we all worked together and shared [00:38:00] intelligence and projects and things like that. So that was all beginning, you know, we were getting to know each other, I guess.

And then big Disney reorg happened where there was this creation of three content groups, so the Disney General Entertainment, sports, which is obviously ESPN, and then theatrical, and then the creation of what we call DMED, which is what I’m a part of, which is Disney Media and Entertainment Distribution, which basically commercializes all that content.

So whether through distribution, the direct to consumer products or our ad sales. So all that’s part of that organization. And it was– that’s a massive adjustment to happen within Disney. And what happened then was they took all of these research teams that had been separate at all the networks, at the streaming services and pulled some of them together into this one centralized team.

There are still other teams at the content groups and we all work together and collaborate. Consider ourselves one big team, I think. And so I was asked to lead that group, which was, you know, I’m incredibly grateful for that opportunity and was [00:39:00] really flattered and appreciative that that was offered to me.

I obviously worked in linear TV and it had been a long time, so I had to get reeducated, you know, in my Nielsen ratings. And by the way, all that Nielsen issues were happening during COVID as well.

Duane: That’s true. That’s true. That’s another layer.

Julie: That was all sort of crazy. But yeah, I mean, we have a really, really great team.

It’s– it makes my day interesting because it’s a very functionally diverse team. So, you know, one minute you’re on something about Disney+, the next, it’s ESPN and you know, the company is–it’s a large company but it’s a sort of a matrix organization. So everybody’s really good, I think, at working together.

And my team, I think, I hope at least that we’re somewhat of a connective tissue there because we touch all these businesses and the opportunity, I think, for the people in the team is that they had been so siloed before, like you only work on ESPN or you only worked on Freeform. This allowed people to, ‘yeah, we gotta keep doing that’.

Like they need all this stuff that those businesses need, but at [00:40:00] least offer some exposure to those other businesses and allow people to learn streaming, learn sports, learn, you know, analytics, get involved, and we’re trying to foster more of that. It’s hard in a remote environment, like I’ve never most of these people in person.

So that’s been the– that’s another real, real challenge now of just like, general workplace living is having to build teams and work together. When– I mean, I think we’re all used to it. We’re all getting used to it, but it’s not the same. I do look forward to the days when we can be back in person.

Duane: We all look forward to normal. [laughs]

Julie: Yeah, I know, I know. But we still– we want flexibility though. Now we’re, now we still, we want to be able to work from home, but we want that, to have that choice. I mean, that’s another, that’s a massive disruption too that happened, you know?

Duane: That’s right. That’s right.

[music]

Duane: So where does this all go, Julie? [laughs] What’s the future for television?

Julie: I think one of the things we’re finding [00:41:00] now, and I mentioned this before, is that consumers are stacking services. And again, they understand how streaming works now, they understand there’s more of them out there. They hear about a show, they wanna watch it, they go get the service.

And to date, we haven’t seen it result in like replacement of services. They’re still adding. There’s gotta be at some point a limit to that. I just don’t know what that is. And we know that there’s still consumer confusion, and there’s always been this desire for aggregation, like just put it all in one place, you know, so that I can just find it more easily.

And certainly some devices, you know, some TVs do that, but you still have to know like which service stuff is on. So I think we will continue to see probably some more aggregation. I mean, obviously at Disney we sell a bundle product that puts Hulu, Disney+ and ESPN+ together and it’s gained a lot of traction ‘cause it gives you a lot of content.

And I [00:42:00] think we’ll see more of that as there’s more industry consolidation. We obviously know, you know, Discovery, Warner Media and you know, CBS, Viacom now Paramount, you know, all those services sort of, you know, that will probably eventually come together. It doesn’t mean there’s gonna be less content. It’s more content.

But I think that consumers have to, at some point, get to a point where they might wanna streamline, but we just haven’t seen it yet. So I think that’s gonna be an interesting evolution to see how that plays out even in the next year, because I would say, between this year and a year ago, it changed pretty drastically, because of the launch of all these services and the awareness of them and the uptake of them, like people got them.

So now everyone’s gonna keep sampling, watching, spending more time. Streaming as a whole is gonna continue to grow. The pie will grow, it’ll get, you know, cut into more pieces. And then I think in another year, maybe we’ll begin to understand what the next step is, but I don’t know if it’ll keep stacking, you know, it seems like it’s gotta come to a peak at some point.[00:43:00]

[music]

Duane: I think one of the challenges that we still face as an industry is right now on any platform– all of the platforms really share this problem, I think, and that’s that if you know what you want, it’s very easy to get from point A to point B. It doesn’t matter what platform you’re on, you know. But the curation dimension of television still has a long way to go.

I don’t know what I want and I’m sitting in front of my TV set. Help me get to some content that’s for me, and as an industry, we just haven’t made good headway, I think, in terms of figuring out a better mouse trap for helping people get to the content they don’t know they want. [laughs]

Julie: It’s really, really challenging because you have a limited space, you know, in your user interface to show what’s like thousands and thousands and thousands of episodes of television.

So yeah, it is a challenge and we’ve experienced that. You know, at Hulu we always understood there was like two entry points. It’s like the, ‘I know what I’m watching’ and the, ‘I don’t know what I’m watching’, and it’s always [00:44:00] harder to solve for the, ‘I don’t know what I wanna watch’.

And now, that’s just more complicated given all the places that you can watch.

Duane: I think that just speaks to the complexity of the human journey. We just don’t realize how incredibly complex we really are. I remember the Netflix challenge. This was, gosh, forever ago where they said, you know, ‘we will give a million dollars to anybody who can figure out a way to improve our curation dimension, like by more than 10%. Our ability to correctly identify the shows that somebody’s interested in’.

A million dollars. And you had all these people, mathematicians, geniuses, scientists, companies working on it. At the end of one year, nobody solved it. They had a prize of, I think it was like $50,000, whoever got closest. And then in the second year, they did it again.

Nobody solved it. The third year, AT&T Labs went and hired the person who had the best idea. The second, the third, the fourth. They hired this whole team of people. [00:45:00] And finally, and what was the improvement? 10%. I mean, that doesn’t sound like it’s that great. I mean, it just speaks to how complex I think we are in our decision making ultimately.

Julie: Well, also there’s like– A consumer can’t always tell you, and this is the other challenging part of research, is that like, you can’t go ask a consumer like, ‘what do you want?’ Or ‘what are you going to want?’ You know, they don’t know. Sometimes until it’s put in front of them, and it’s even just gotten a lot more complex because we used to be in a world where we knew what content was being released when. So obviously…

Duane: And what was gonna be big. ‘Cause you knew it was coming from…

Julie: Yeah. ER is coming back, that’s going way back. But you know, this show’s gonna be on Thursdays at nine or whatever. And now we know like, ‘oh, there’s gonna be another season of Ozark’ or whatever it is. And probably a lot of people are gonna watch it, but we don’t know when they come all the time.

We don’t have that sort of planning ability. And then there’s all the things that are really unpredictable, like Squid [00:46:00] Game that came outta nowhere. Like, I would not have guessed that I would’ve been watching a Korean drama when I– and I did. And then there’s things like Tiger King, that’s a documentary docu-series that I didn’t expect to be watching either.

So there’s certain things that are just never gonna be covered by an algorithm that are going to account for all the things that sort of catch fire. And I think The Handmaid’s Tale is a really good example too of that because like on paper, it doesn’t sound like something that [laughs]– obviously it has no IP and all that, but like this dystopian drama, like if you don’t think people are gonna wanna watch something that dark and they certainly did.

So there’s so much now that’s really unpredictable that there’s this power because there’s an audience there and people find it. And word of mouth has always been a thing. But it’s– you can’t really plan for ‘when should we do our release?’, because we don’t know what’s gonna happen in the rest of the world.

[music]

 

Duane: From a [00:47:00] research perspective, what is your biggest challenge now? You’ve come into this new role, you’ve got a lot of challenges. I mean, honestly, there are a lot of things on your plate. What’s your biggest challenge now going forward?

Julie: Yeah, that’s a good question. I mean, I think just keeping up with the very fast evolving consumer ecosystem and not having what used to exist back in the day, which is fairly reliable measurement, right? Because, not just because Nielsen’s had a lot of challenges. Everybody’s had challenges, but because, just there were fewer things that people could do, you know? So media measurement came down to measuring broadcast networks, and then cable came along and that got a little bit more fragmented, obviously, but it was measuring television.

And now people can get video from a lot of places, or they’re not even doing video, like they’re spending their free time, that they can allot to entertainment [00:48:00] doing a lot of different things. And it is impossible to paint that picture for anybody. And we get asked for it all the time. Like, ‘can I have the chart that shows what people are doing?’

Like, I’d love to give you that chart. We don’t really know. I mean, we can do it from survey based tools and that’s certainly is useful, but it’s not the same thing as having sort of passive measurement and people are trying to get there but it’s very hard. And add to that now, this sort of chase for the new currency, can we shift a currency?

It’s hard to get a whole industry to move and get total agreement on that. And I think there’s really different pieces to this. There is the currency piece, which is about ‘can we get something that we can all agree that we wanna transact on?’ And then there’s the content measurement piece, which is, they’re related, but they’re also a little bit different.

But which is, ‘how are people spending [00:49:00] their time and what are all the ways that they’re interacting with the content that we make and distribute?’ And nobody’s really good at either one of those right now. None of it’s perfect. So we’re kind of working with what we got. You gotta piece everything together, so I think that’s the biggest challenge is just not knowing what people are doing out there and also how are we then figuring out how we’re monetizing all of that.

[music]

Duane: I always close with my last question about what advice you would have for– I mean, we have a new generation of researchers in the industry. The majority of our researchers now are really new to the industry in a lot of ways. What advice would you have for this new generation of researchers who are coming in?

Julie: I would say that there’s really never been a more fun time to be doing this job. It’s really, it’s a fun industry to be in, and I feel like it’s more impactful now than it’s ever been. I do [00:50:00] think though, it’s been a battle to… in some places I’ve worked to get people to really think about the consumer first.

And it’s been an evolution. I think now most companies do that or say they do and they understand that it’s important, but it wasn’t always, and I think there are still pockets of the world where people are like, we’re just gonna launch this thing. I just feel intuitively like this is the right decision or it’s the right business decision.

And I think as researchers, we have to fight to make sure that that voice is heard. And one of the things I tell my team is, you have to speak with confidence and with frequency, because the more people hear something and the more confident you are that you know it to be true, the more they’ll believe it.

And so you have to just keep saying it because I think there can be this frustration that like, I know this and yet we did that. Like I know, I know, we know that and we did that. And there’s always reasons. That business decisions are made that might not exactly map to a consumer insight, but that doesn’t mean that you don’t continue to say it.

It just means that there was [00:51:00] another reason for it. So I guess, it was a long answer to say, keep communicating what you know to be true. And keep pushing for your stakeholders to think about the consumer before making those big decisions.

[music]

Duane: Wow, Julie, we covered a lot of great ground today.

We talked about ad innovation, the rise of digital, brand integrations, the whole change that happened with Disney, with all the things that were happening at the same time. Lots of great ground. Thank you so much for sharing with us, and thank you so much for your contributions to the industry.

Julie: Thank you, Duane. That was a lot of fun and I hope we get to keep working together too.

Duane: Absolutely. So thanks again, Julie. And I want to thank you, the audience, for joining us today. Remember to follow and subscribe to our podcast, tell your friends about us, leave your ratings and comments, and stick around after the podcast [00:52:00] for more information about MediaScience.

So until our next episode, I’m Dr. Duane Varan, CEO of MediaScience. Thanking you for joining us today and inviting you to our next episode of Legends of Media Research.

Female Voice: Almost every major innovation in the TV advertising industry over the course of the past decade was first tested by MediaScience researchers. Whether you’re talking about video ads on mobile phones, or limited interruption ad pods or program context effects, or brand integrations, or pause ads, or picture and picture ads, or six second ads or interactive ad formats. [laughs]

I mean, the list goes on and on. All were first tested by MediaScience. MediaScience is the leader in media [00:53:00] innovation research. So when you are looking for media or advertising innovation research, collaborate with MediaScience. Learn more at mediascience.com.