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By some estimates, total spending on political advertising around the midterm elections could reach $7.8 billion this year, a huge opportunity for streaming services reeling from subscription cuts and a challenging. But they also pose a potential liability, as Hulu just found out.
The Disney-backed company drew something of a line in the sand this past week before abruptly reversing course. It all began with the streaming service’s apparently unspoken company policy prohibiting political ads with “controversial” messages led the streamer to reject numerous spots from Democratic candidates and organizations, specifically those dealing with hot button topics like abortion rights, gun control, climate change, and the January 6 attack on the U.S. Capitol.
The first Democrat to take notice of the policy and raise the alarm was New York House candidate Suraj Patel, who attempted to purchase ad space on Hulu for a spot in which he mentioned Republican positions on some of these subjects, and showed some footage recorded on the ground on January 6th. He claims he was told that the Hulu policy around sensitive ad content was real but “unwritten,” and says representatives from the streamer suggested he replace the word climate change with “democracy” and images of January 6th with photos of Donald Trump.
After Patel posted an open letter to Disney CEO Bob Chapek and Hulu President Joe Earley expressing his concerns, Hulu reversed its decision and retroactively approved his ad. But rather than mollifying offended Democrats, this has created even more uncertainty about the policy and what kinds of messaging are actually prohibited.
And it wasn’t an isolated case. The Democratic Senatorial Campaign Committee, the Democratic Congressional Campaign Committee, and the Democratic Governors Association claimed they attempted to purchase joint ads on Hulu on July 15th which dealt in part with abortion and guns, and which were similarly rejected.
Hulu originally declined to publicly address the controversy; an unnamed insider told the Washington Post that all ads are reviewed by the streamer on a case-by-case basis, and they don’t publicly disclose any of their advertising guidelines.
Then this morning, there came an official announcement from Disney Plus: “After a thorough review of ad policies across its linear networks and streaming platforms over the last few months, Disney is now aligning Hulu’s political advertising policies to be consistent with the company’s general entertainment and sports cable networks and ESPN Plus.
Hulu will now accept candidate and issue advertisements covering a wide spectrum of policy positions, but reserves the right to request edits or alternative creative, in alignment with industry standards.”
While this might seem like a win for political advertisers, this new “policy” is still unnervingly vague, but that’s likely a feature, not a bug. Hulu controls the content it will distribute, and doesn’t have to get into the weeds about how these decisions are made, or what sponsors and special interest groups will face less restrictive guidelines.
The Communications Act of 1934 governs companies broadcasting over the public airwaves, and mandates that they provide candidates from both sides of the political divide with equal time, but these rules don’t apply to streaming services. (It’s hard to imagine how they even could. Would a three-part docuseries about Hillary Clinton require a three-part docuseries about Mike Pompeo for balance?)
Back in May, at the “upfront” presentation to potential sponsors, Disney executives noted that the service won’t take many types of ads, including spots from rival services, political advertising and ads for alcohol. Now that they’ve reversed course, it’s unclear who will be making the decisions regarding political ads. Hulu execs, or Disney brass?
I’m Nuts, You're Nuts, We're All Nuts For Donuts
Holey Grail Donuts, a Hawaiian company specializing in taro delicacies, raised $9 million in new financing for a Los Angeles expansion. Founders Nile and Hana Dreiling of Kauai want to take on what they call the “stale $40 billion donut industry.” (How dare!)
The pitch? Their donuts – fashioned from the tropical plant taro, and fried in fair-trade coconut oil – are more sustainable and environmentally responsible, and also don’t leave the waxy taste in your mouth that you sometimes get with conventional donut varieties. Their treats are available in around 60 flavors, including unconventional options like turmeric, tangelo and cracked black pepper. (They don’t have Boston Cream in Hawaii?)
This is a big push for the company, which started in 2018 out of a small trailer, and now runs a food truck in Waikiki and two Hawaiian brick-and-mortar locations. The brand’s $15 “tasting box” of four donuts will soon be available at new storefronts in Santa Monica and Larchmont, plus a food truck serving the greater Culver City area. So get ready to see them crossing your Instagram feed before too much longer.
Holey Grail has their work cut out for them, as L.A. is something of a donut town. This is, in part, due to the influence of a single man: Cambodian immigrant Ted Ngoy, who moved to California in the 1970s and started a mini-empire of donut and pastry shops along with fellow recent arrivals. The terrific documentary “The Donut King,” about the rise and fall of Ngoy’s donut shop empire, is highly recommended, and available now on Hulu. — Lon Harris
After a couple of years where pandemic lockdowns made lightning-fast, app-based delivery essential, the industry is undergoing a shakeout—and apps that promise delivery under 30 minutes are facing an existential crisis.
The Santa Monica-based venture capital firm is “flipping the traditional venture model” on its head. Today it launched Struck Studio, which will develop startup concepts from scratch—and then recruit the right founders to lead them.
TikTok pledged to give “selected researchers” more transparency into its platform and content moderation systems, a decision that comes amid fresh concerns that the Chinese-owned app could pose national security risks.
On this episode of the L.A. Venture podcast, A16z Partner Megan Holston-Alexander, who heads the company’s Cultural Leadership Fund (CLF), discusses how she uses her network to bring Black leaders to roles in tech.
What We’re Reading Elsewhere...
- Apple buys location for a new campus in San Diego.
- SpaceX goes after Dish's proposed 5G expansion into new radio frequencies.
- Robots are picking strawberries in Central California.
- NY-based music tech company Kobalt will sponsor classes at L.A.'s Manuel Arts High School.
- Rancho Palos Verdes takes a step toward installing new surveillance tech to detect potential wildfires.