CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S JULIA BOORSTIN INTERVIEWS JASON KILAR, CEO OF HULU, LLC, TODAY ON "POWER LUNCH"

WHEN: Today, Tuesday, November 11th 1:40 PM ET

WHERE: CNBC's "Power Lunch"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Jason Kilar, CEO of Hulu, LLC, today on CNBC's "Power Lunch."

All references must be sourced to CNBC.

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KNEALE: A YEAR AFTER ITS LAUNCH HULU, A JOINT VENTURE OF NBC UNIVERSAL, THE PARENT OF THIS NETWORK, AND NEWS CORPORATION, IT'S BECOME THE GO-TO DESTINATION FOR TV SHOWS ON LINE. OUR MEDIA CORRESPONDENT, JULIA BOORSTIN, IS AT THE PIPER JAFFRAY ANNUAL MEDIA AND INTERNET CONFERENCE IN LAGUNA BEACH, CALIFORNIA, WITH A "POWER LUNCH" EXCLUSIVE. HAVE AT IT, JULIA.

BOORSTIN: WELL, DENNIS, HULU'S REDEFINED THE MODEL FOR ONLINE VIDEO. LUCKY ENOUGH TO BE JOINED BY THE CEO, JASON KILAR. THANKS FOR JOINING US.

KILAR: THANK YOU VERY MUCH JULIA.

BOORSTIN: SO JASON, IN SEPTEMBER HULU HAD 12 BILLION UNIQUE VISITORS, STREAMING 145 MILLION VIDEOS, ACCORDING TO COMSCORE, YOU HAVE MORE THAN 100 CONTENT PROVIDERS AND OVER 100 ADVERTISERS. BUT RIGHT NOW HULU IS THE NUMBER SEVEN ONLINE VIDEO WEBSITE. HOW BIG AND INCLUSIVE CAN HULU GET?

KILAR: THERE'S A LOT OF HEAD ROOM. KEEP IN MIND THAT IN CONTEXT OF THE PUN THAT WE ARE PLAYING IN, JUST IN THE U.S. ALONE THAT'S $80 BILLION INDUSTRY AND THAT'S AN AD SUPPORTED PREMIUM VIDEO INDUSTRY. SO WE'RE A START-UP. WE'RE EIGHT MONTHS INTO IT IN TERMS OF WHEN WE HAVE THE OFFICIAL COMMERCIAL LAUNCH, AND IT'S VASTLY EXCEED OUR EXPECTATIONS. BUT KEEP IN MIND, THERE'S SO MUCH HEAD ROOM, SO THERE'S A LOT OF PLACES THIS CAN GO.

BOORSTIN: HULU IS ENTIRELY AD SUPPORTED. HOW DO YOU EXPECT REVENUES TO HOLD UP IN THE ADVERTISING DOWN TURN?

KILAR: WE'RE SIMPLE MINDED THE TEAM AT HULU, WHICH IS, WE THINK IF WE CAN OBSESS OVER QUALITY AND BUILD A BETTER MOUSETRAP, THAT GOOD THINGS WILL HAPPEN. USERS WILL ADOPT THE SERVICE, ADVERTISERS WILL SEE GREAT VALUE IN IT, AND THAT'S WHAT WERE SEEING. WE'VE GONE FROM A HANDFUL OF ADVERTISERS TO OVER A HUNDRED. AND SO WHEN YOU TAKE A LOOK AT THE RAMP OF THE BUSINESS IN TERMS OF REVENUE IT'S VASTLY EXCEEDING OUR EXPECTATIONS, AND SO EVEN IN THE MIDST OF THE CURRENT FINANCIAL MARKETS WE'RE SEEING BUSINESS GROW VERY, VERY AGGRESSIVELY.

BOORSTIN: SO HOW IS HULU DIFFERENT OR MORE THAN JUST A VIDEO ON DEMAND SERVICE FOR PEOPLE PROCRASTINATING AT WORK?

KILAR: YOU CAN PROCRASTINATE ANY TIME OF THE DAY IT TURNS OUT. THE MAIN DIFFERENCE IS THAT WE'RE NEUROTIC ABOUT QUALITY. IT SOUNDS TRITE BUT IT REALLY IS TRUE THAT WE STAY UP LATE AT NIGHT AND OBSESS OVER EVERY PIXEL. WE THINK USERS WILL NOTICE, WE THINK THAT CONTENT PARTNERS WILL NOTICE AND ADVERTISERS WILL NOTICE AND SO AT END OF THE DAY THE HALLMARK OF THE BUSINESS PLAN IS PREDICATED ON QUALITY AND OBSESSIVENESS TO DETAIL. AND SO THAT REALLY IS WHAT SEPARATES US.

KNEALE: JASON, DENNIS KNEALE HERE. ONE OF THE SENIOR MOST EXECUTIVES HERE IS CERTAIN THAT THE ENTIRE SERVICE IS A DVR FOR SLOUGHING OFF AT WORK. DOES MOST VIEWING HAPPEN IN THE HOME OR AT WORK?

KILAR: IT ACTUALLY HAPPENS EVERYWHERE. ANYWHERE YOU'RE CONNECTED TO THE INTERNET. THE GOOD NEWS TODAY THAT'S PRETTY MUCH EVERYWHERE. BUT ACTUALLY IT'S INTERESTING THAT PEOPLE WATCH MOST OF THE CONTENT, IN TERMS OF ON ANY GIVEN HOUR, IN THE EVENING. SO THAT WOULD SUGGEST THERE'S A LOT OF VIEWING GOING ON WHEN YOU'RE AT HOME WITH THE COMPUTER IN FRONT OF YOU, WHETHER IN THE BED OR WHETHER IN AN OFFICE OR SOMETIMES IN THE LIVING ROOM WITH A LAPTOP OPEN ON YOUR LAP.

KNEALE: JULIA --

BOORSTIN: YOU TUBE, IT'S --

KNEALE: JULIA WAS SAYING THAT YOU HAD 140 MILLION VIEWINGS IN SEPTEMBER. AND I THINK YOU TUBE PROBABLY HAD OVER A BILLION. WHAT'S TO STOP YOU TUBE AND GOOGLE FROM JUST FROM CRUSH YOU?

KILAR: WELL, I GET ASKED THAT QUESTION QUITE A BIT, AND AT THE END OF THE DAY IT REALLY COMES DOWN TO WHAT'S YOUR FOCUS AS A COMPANY? OUR FOCUS IS VERY NARROW WHICH IS WE'RE EXCLUSIVELY FOCUSED ON PREMIUM CONTENT. THAT'S THE ONLY THING WE CARE ABOUT. I PERSONALLY BELIEVE THAT USERS DESERVE A SERVICE THAT'S EXCLUSIVELY FOCUSES ON PREMIUM CONTENT. I THINK THE USER GENERATED CONTENT BUSINESS A GREAT ONE BUT IT'S SEPARATE AND THAT'S ONE THAT WE ARE NOT FOCUSED ON. I THINK AT THE END OF THE DAY YOU CAN SEE TWO BUSINESSES DO VERY, VERY WELL AND EARLY RETURNS ARE SUGGESTING JUST THAT.

BOORSTIN: NOW YOUR PARENT COMPANIES, NBC UNIVERSAL AS WELL AS NEWS CORP AS WELL AS THE REST OF THE MEDIA GIANTS ARE STRUGGLING WITH DECLINING AD REVENUE. DOES HULU CANNIBALIZE TV AD RATINGS? TV RATINGS AND ALSO AD REVENUES?

KILAR: SO WE'RE ACTUALLY FINDING JUST THE OPPOSITE AND I'LL SHARE SOME STATS WITH YOU, IF YOU TAKE A LOOK AT THE TOTAL CONSUMPTION OF MEDIA IN THE LIVING ROOM, SO OVER CABLE, SATELLITE AND OTHER SERVICES IT'S ACTUALLY UP ACCORDING TO NIELSEN VERSUS THIS TIME LAST YEAR. WHICH IS A GOOD THING, WHICH IS AS YOU GIVE VIEWERS MORE CHANNELS, MORE CHOICE. THINGS LIKE THAT, THEY'RE GOING TO WATCH MORE. AND SO IN TERMS OF CONSUMER BEHAVIOR IT'S ACTUALLY GROWING IN THE LIVING ROOM, AND I THINK PART OF THAT, WE PLAY A SMALL PART IN IT, IS THAT WE MAKE IS SO MUCH EASIER TO SAMPLE PROGRAMS. I GET EMAILS ALL THE TIME ABOUT THE SHOW CALLED "IT'S ALWAYS SUNNY IN PHILADELPHIA" WHERE PEOPLE ARE BASICALLY SAYING MY FRIEND TOLD ME ABOUT "IT'S ALWAYS SUNNY IN PHILADELPHIA" I DIDN'T KNOW WHAT CHANNEL IT WAS ON, I SAMPLED IT ON HULU, I BECAME ADDICTED TO IT, AND NOW I WANT IT IN THE LIVING ROOM. WE GET A LOT OF THAT HAPPENING AND YOU SEE IT EVEN WITH "SATURDAY NIGHT LIVE" WITH ALL THE TINA FEY MOMENTS, WHICH IS YOU KNOW LOREN MICHAELS AND HIS CREW HAD MORE PEOPLE THAN EVER IN FOURTEEN YEARS WATCH IT ON "SATURDAY NIGHT LIVE" AND IN ADDITION TO THAT HE ALSO HAD A TREMENDOUS AMOUNT OF PEOPLE WATCH IT THROUGH OUT THE WEEK. SO HE BECAME RELEVANT THROUGHOUT ALL SEVEN DAYS OF THE WEEK.

BOORSTIN: WELL, IT'S REALLY TRANSITIONING TO WHATEVER YOU WANT, WHENEVER YOU WANT IT MODEL. JASON THANKS SO MUCH FOR JOINING US.

KILAR: THANK YOU JULIA




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