Hulu showed up Netflix with a historic Emmy win, but it shouldn't get comfortable

handmaids tale

Hulu had a right to party on Sunday night, with “The Handmaid’s Tale” raking in multiple Emmys including the coveted win for best drama series, a pair for lead and supporting actress, and one for directing.

It was a huge night for Hulu, not only because it became the first streaming service to win best drama, but also because it beat Netflix to the punch. Though Hulu recently committed $2.5 billion for its 2017 programming budget, roughly in line with what HBO spends, it still lags way behind Netflix’s $7 billion (for 2017).

So even though HBO and Netflix had more overall wins, the fact that Hulu triumphed Sunday with a win for best drama was taken by some as a message: a big checkbook doesn’t mean everything in Hollywood.

But if Hulu wants to sustain success against rivals like Netflix, Amazon, and HBO, it can’t rest on its laurels. Production for “The Handmaid’s Tale” starts on Tuesday, September 19, and it’s going to need a lot more besides.

If anyone knows that it’s Amazon.

Amazon's soul searching

Though Amazon had a poor showing at the Emmys this year, it has generally fared well in big categories at awards shows. Its film “Manchester by the Sea” cleaned up at this year’s Oscars. Its shows “Transparent” and “Mozart in the Jungle” have won Golden Globes for best comedy (and Jeffrey Tambor’s performance). And “Transparent,” in particular, felt like it struck a deep cultural resonance when it debuted in 2014, in a way that echoes what “The Handmaid’s Tale” is experiencing now.

But Amazon has recently begun a major overhaul of its programming strategy, with CEO Jeff Bezos reportedly impatient for a “Game of Thrones” style hit. As part of the shift, the tech giant cut two pricey dramas related to F. Scott Fitzgerald.

“We’re very interested in getting those top shows — something that is broadly popular and admired,” Amazon Studios boss Roy Price told Variety. “We want to allocate a lot of our attention and resources going forward to that kind of thing.”

Awards are great, but there's a limit to what they can give you.

Hollywood buzz isn't everything

Both Hulu and Amazon still lag behind Netflix in the broad recognition their programming gets from consumers.

A recent poll of US millennials found that 79% thought Netflix had the best original content, while Amazon and Hulu got only 3% and 4% respectively. "Premium channels," such as HBO or Showtime, came in at 14%.

Relatedly, in an RBC survey distributed Monday, 53% of US consumers said they’d used Netflix to watch movies or TV shows in the last year — 21 points ahead of Amazon and 28 points ahead of Hulu.

Here is a chart of RBC’s findings:

Screen Shot 2017 09 18 at 8.48.04 AM

Netflix is constantly evolving

Hulu may have embarrassed Netflix at the Emmys, but it’s going to have to do a lot more than that to keep up with Netflix’s dizzying pace of expansion.

Netflix has been making aggressive moves to vertically integrate its company and own all aspects of production and distribution. Instead of farming out the production of its originals to outside studios, Netflix’s content chief Ted Sarandos told Bloomberg a few days ago that it will produce 75% of its new projects moving forward. That is a staggering number considering the first drama original Netflix made in-house was “Stranger Things,” which came out last summer.

In August, news broke that Netflix had lured TV legend Shonda Rhimes away from ABC after 15 years. That same month, Netflix announced its first acquisition, buying indie comic book publisher Millarworld to develop its own intellectual property.

And these moves to make Netflix less reliant on outside companies make sense.

With Facebook and Apple both barreling into originals with a reported $1 billion budget each, not to mention Amazon, YouTube, Hulu, HBO, Disney’s upcoming streaming service, and many more, the market for good shows and talent is going to get even more cutthroat.

Hulu’s Emmy wins for “The Handmaid’s Tale” were a big vote of confidence from the TV industry, and they could be instrumental in helping Hulu land Hollywood talent — like Elisabeth Moss. But Hulu is still in for a grueling battle over the next few years, and it needs that $2.5 billion to help capture and sustain the attention of the general public, turning high-profile buzz into additional subscribers.

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