Nets Wake Up? Ponder Whether Hulu Hurts
It’s amazing that it took them this long, but the nets and production companies seem to be finally realizing that maybe putting content out for free isn’t going to work out. The Los Angeles Times has an interesting post today that explores the problem.
Here’s a snippet:
… in making a bid for the next generation of Internet- attuned viewers, Hulu’s owners have strained their lucrative relationships with cable and satellite operators. Companies like Time Warner Cable Inc. and DirecTV Group Inc. pay cable networks billions of dollars each year to carry programming. Believing that they should have exclusivity because their payments support the enormous cost of producing TV shows, such companies have been pushing back against the Hulu freebies.
Investors also are wary that the media companies’ embrace of the Internet-content-should-be-free philosophy threatens one of Hollywood’s biggest profit centers: cable programming.
“If you give away your premium content for free, you are basically hastening your own demise, signing your own death warrant,” said Laura Martin, a media analyst with Soleil-Media Metrics. “There is a choice that companies have to make.”
So, maybe they have been reading this blog….many of us for months have been pointing out this very fact, along with others, why this is not the financial monster some woud have you believe.
It’s not ‘Now’ Media….!
One myth you will hear is that if they don’t put if out for free, then someone will. I’ve noticed that the NFL doesn’t seem to have those issues. They control their product and vigorously defend their rights worldwide. The producers ought to be able to do the same if that is their desire. In the final analysis, I think it’s their only option.
all the more reason we have to stay flexible and on top of(ie do our own research, look at their books, etc) a medium that is in a state of flux and hasn’t found the way to make money yet. Interestingly enough, I know a lot of 16 year olds that have bought entire seasons of “Chuck” off of iTunes, which, if this contract were now in place, would provide for a residual percentage that is twice that of DVD’s.
This is called “channel conflict.” It’s roughly the same problem as when a consumer brand decides to sell through discount and warehouse stores that compete with its traditional base of retailers.
I think the nets’ big mistake is to promote Hulu as a way to rot your brain faster, i.e., a viable way to watch more TV that’s supposedly equivalent to the “TV set” in the living room. They ought to promote it as the backstop to your TV: a way to catch up on episodes you missed or to access great shows from the past, albeit in an admittedly inferior viewing experience. That way, they establish Hulu as a separate distribution channel that provides convenience but not viewing quality.
Hulu isn’t any more free to the consumer than broadcast TV has been for the last 50+ years. The watcher still has to watch commercials to see the content.
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Ed. Response – That’s a good point, with one quibble. Commercials on broadcast are played to an audience of millions and get a good CPM. A commercial played to an audience of one produces revenue that’s miniscule.