Reports out of the Broadcasting & Cable "OnScreen summit" yesterday quoted News Corp deputy chairman Chase Carey saying Hulu could begin charging for services as early as 2010.
People don't need to get too worked up about this if they read all his comments. The big problem Hulu has is it can't charge for stuff that ABC, NBC and FOX online properties are giving away. If that happens, they might as well fold up shop because people will just go directly to the networks web sites and watch for free.
But Carey seems to understand this according to Broadcasting & Cable's Claire Atkinson:
Carey says that while throwing up a pay-wall around all content is not the answer, it doesn’t mean there wont be fees for some specially-created content and TV previews. Windows are just around the corner. American Idol audition previews anyone? Mobile Hulu is another potential way of making money.
Here's who needs to be worried: people who don't subscribe to cable and are watching stuff on Hulu like my new favorite show, FX's Sons Of Anarchy. Currently there are a few free episodes available on Hulu (and on FXnetworks.com) though new episodes lag by ~8 days from original air date. I'd look for those kinds of shows to go behind a pay wall, on FXnetworks AND on Hulu. Why? Because FX makes its money from a combination of advertising and carriage fees. Giving the content away to people who are already subscribers isn't really a problem, but giving it away to people who aren't is.
Much of the "TV Everywhere" notion that cable is touting these days has to do with giving paying subscribers access to content they are already paying for online. But they'll need to figure out how to validate those customers, and in cases like Hulu's they'll need to figure out how to charge the people who aren't paying.
I understand that will irk some of the people who weren't already paying for access to the content. But sorry, screw you if you think you're entitled to have for free what others have to pay for. Why should we paying customers subsidize your free access? We shouldn't!
The bigger short term challenge for online video though is this: they need to figure out how to start inserting more commercial spots in the online content.
I know a lot of people who literally LIVE on Hulu to catch up with their favourite shows
(being in Canada, we can’t access it anyways)
But I’ve never really understood the “appeal” of Hulu over torrenting your favourite shows – especially for newer programming that has aired over the past few weeks. Why do people choose Hulu over downloading (HD quality) programs from torrents?
(apart from the legal/moral consequences)
because there are far few barriers to the content (particularly 1-4 below):
1.) don’t have to know about torrents or have downloaded torrent software
2.) don’t have to look for and find torrents
3.) don’t have to wait for torrents to download
4.) don’t have to wait to watch the program
5.) don’t have to worry about downloading the proper codecs
6.) don’t have to worry about downloading crap masquerading as the content you thought you were downloading
Well that’s quite the comprehensive list LOL
1,2,4,5 are more of a “one time” kind of thing, but 3 is definitely the big factor (I’m assuming) which makes Hulu > Torrents
for the masses, anything that is a barrier, is a barrier! A “one time only” barrier is still quite a huge barrier. We still live in a world where most people do not ever change the default settings of their operating systems and software applications.
Also, #4 is not a one time thing, it’s an every time thing.
Robert said:
“I understand that will irk some of the people who weren’t already paying for access to the content. But sorry, screw you if you think you’re entitled to have for free what others have to pay for. Why should we paying customers subsidize your free access? We shouldn’t!”
I totally agree with this comment. I get so irritated with people who whine and cry that a cable show like “Sons of Anarchy” or “Damages” isn’t available the next day online for free. You know these people are either to cheap or maybe they can’t afford cable, which I can understand with the economy. But so what, nothing in this world is for free and cable companies do have some pretty good package deals right now to choose from.
I sih HULU worked in the UK…
Hulu’s big assest is convience and selection, but mostly convience. Drop the convience and charge for it, and there goes 90% of your user base, if not more.
As someone who knows how torrents works, and has the ability to do so, and chooses Hulu over it (for more than just moral reasons), my number one reason is hard drive space. Why do I want to clutter my hard drive with shows I can stream?
Eh. I go back and forth between Hulu and torrents for the NBC Thursday night comedies — there’s too much on to Tivo it all.
Arguments for torrents: there are a huge number of seeds for these shows, so there’s close to no wait to download them, and once you have them, you can stream them pretty easily to your TV. (TVersity on the computer, Xbox connected to the TV, etc.) The fact there’s no commercials this way is a plus for a lot of people, though I find the Hulu ads are pretty non-intrusive.
Arguments for Hulu: comes with closed captions, which is nice when you have noisy kids in the room. Is a little more instant, but not really enough to make it a deciding factor for me.
always have another way to get content
fancast for instance
with it being so easy you would think they would have an interest to keep it free
for instance offering extras-episodes and scenes you wouldnt catch on regular TV for the same shows
People who want to watch for free use the network sites and such. People who want to pay use iTunes. What would be the point in Hulu going paid?
shelly, if you read the article, you’d see that shows that are free on network sites will continue to be free on Hulu. Cable programs will be what costs money, and they will either be taken down from the network sites, or cost money there as well.
An easy way around the perceived “inconvenience” of paying for Hulu could be for cable providers who are already offering cable and internet to include a Hulu subscription option as part of your package. This also solves the “validation” problem, since it lets Hulu know that you are already a paying customer.
Hulu “just works”. You need a standards compliant web browser and a Flash plug-in. My “living room media box” that’s hooked up to the PC is running Ubuntu GNU/Linux and Hulu works fine, full screen, on that system. BitTorrent is a can of worms and there’s always the risk of the MPAA sending you a letter demanding $3,000.
I use BitTorrent for downloading Ubuntu releases. Unauthorized copyrighted media rips downloaded over the Internet? Not for now.
Adam, I agree with you though you can count on the people who are NOT already subscribing bitching the loudest about this.
Hey, now. I’m not subscribed and I recall writing something a month or so ago about how YouTube should start charging for Lions Gate TV properties!
Julia, I’m not lumping you in with the unreasonably entitled crowd! But there *is* an unreasonably entitled crowd, even if you are not among them!
Surely if iTunes and Amazon UnBox offers paid for downloads then surely Hulu could do it? I agree that cable shows should be pay only especially for HBO, Showtime and Starz shows. I think a Spotify system could work where you have free streaming for most shows but with ads or a Premium choice where you get exclusive content plus no ads for a small sum per month.
I think this is actually a bigger deal than you’re giving it credit for.
What’s the richest potential source of revenue for broadcast networks over the next ten years? Retrans fees, by an enormous margin.
How do you think cable operators will feel about paying for broadcast network programming that’s available for free online? My guess is that may have a slight problem with it!
Are the networks likely to protect the pittance they make from online video while risking the potentially gigantic haul from retrans? Not likely at all.
Add it up. Broadcast programming will be treated just like cable programming online as a condition of retrans deals.
The writing is on the wall. In five years Hulu will be a pay site accessible only by subscription or by password to paying cable customers – if it exists at all.
Mikey, 5 years is too far out of my time horizon and I wonder if it won’t take a bit longer.
I definitely see it as an issue though, but it will mean ABC.com, FOX.com, etc. will also have to scrap free content. That to me is a bigger story than “No Free Hulu”, but I don’t see it happening in 2010 (or 2011 or 2012) so there will be plenty of time to talk about it!
Edit: though I agree that “There will be no free current TV content in 2015″ is a much more interesting story…if it plays out like that