Hulu's Owners Unable To Find Idiots Willing To Overpay To Take Hulu Off Their Hands Before They Kill It

from the tough-luck dept

We recently noted that the attempt by Hulu's owners to sell Hulu wasn't going well, mainly because those same owners had made it clear that they hoped to kill Hulu, by limiting how much it could compete with their lucrative legacy business of cable TV. No one was willing to offer more than $2 billion -- significantly less than what Hulu's owners wanted -- other than Google. But Google would only do it if the TV companies agreed to certain conditions (i.e., not killing off Hulu by limiting content, requiring a paywall, etc.)

So it comes as little surprise that Hulu has now announced that its owners are no longer trying to sell the company off. Instead, they'll focus on suffocating it from within. Well, that part wasn't mentioned, but watch what happens to Hulu execs over the next few months. I think it's likely that we're going to start seeing some departures of key people. Hulu was an amazingly well executed offering with a really capable team... but as we predicted, the fact that the only way it could really succeed was to cannibalize the business of its owners, almost certainly meant that Hulu would never be allowed to execute on the strategy it needed to become a massive player.

Of course, what the big TV companies still fail to recognize is that killing off Hulu doesn't stop the move to an a la cart, online driven world. It just means that when it comes, they will be even less relevant, and less able to capitalize on it.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, Oct 13th, 2011 @ 7:25pm

    I thought Hulu was a dumb idea when it started and now it is a brilliant dumb idea that I love.

     

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  2.  
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    MarksAngel (profile), Oct 13th, 2011 @ 7:41pm

    I already have ala cart t.v. online and you know what it's both commercial free and cash free as in I don't pay a dime....see ya hulu I won't miss ya.

     

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  3.  
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    Anonymous Coward, Oct 13th, 2011 @ 7:43pm

    I will try to paint myself with a broadbrush of surprise just to blend in with the entertainment industry legacy bosses, you know just to show some solidarity.

     

    reply to this | link to this | view in thread ]

  4.  
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    blaktron (profile), Oct 13th, 2011 @ 7:43pm

    Wow, I'm incredibly surprised that no one wanted to partner with a bunch of self professed backstabbers in a business they openly claim to want to demolish. Im shocked that people who have managed to accumulate billions of dollars dont want to give it to them while they are actively and publicly trying to kill. Shocked.

     

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  5.  
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    E. Zachary Knight (profile), Oct 13th, 2011 @ 8:09pm

    Why don't they simply shutter it? That seems to be a far simpler solution that slowly torturing it to death.

     

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  6.  
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    jupiterkansas (profile), Oct 13th, 2011 @ 8:12pm

    And people complain about Netflix!

     

    reply to this | link to this | view in thread ]

  7.  
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    Jay (profile), Oct 13th, 2011 @ 8:13pm

    Re:

    Then the consumers just move to illegal alternatives... And Hulu might try a lawsuit. I find it sad that they're going to suffocate slowly when they were doing so well beforehand.

    But it's the same lesson over and over... Never work with the legacy businesses unless you want to succeed.

     

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  8.  
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    A Guy (profile), Oct 13th, 2011 @ 8:21pm

    Well, at least it's comforting to see entertainment execs living up to expectations. They will stick their heads firmly back into the sand and shout "LALALA piracy LALALA. Help me government we cannot compete.(because we're dumb)" and nothing will change.

    Meanwhile, my viewing habits will not change other than one less (and usually inferior) source for entertainment.

     

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  9.  
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    wheels4me2 (profile), Oct 13th, 2011 @ 8:55pm

    Shocker! Commercial free torrents kick-ass over streaming commercials

    The cable-cutters that I know despise streaming with commercials. Torrents on the player of their choice with no commercials wins big with the home crowd and works for much of the mobile crew.

    RIP, ya dumb bastards!

    For a model that works for artists, check out http://www.gocomics.com/.

     

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  10.  
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    Claire Ryan, Oct 13th, 2011 @ 9:31pm

    Not just this

    I think the problem here is that the cable companies don't realize it's not just Hulu, Netflix, Apple TV, etc that's cannibalizing their cord business.

    When you consider the sheer number of entertainment options online, not the least of which are gaming, Youtube, or discussing media issues on sites such as Techdirt, it's clear that there is far more easily accessible and free content out there for people to enjoy at their convenience than what they can offer sequentially through cable.

    The challenge is not just to develop an entertainment option better than cable - they also have to be more attractive than, say, a free web series like The Guild, the entirety of College Humor, or even Farmville. Granted, their bigger budgets work in their favor, but good CGI and special effects are getting cheaper every year (see Freddie Wong), and they're not the only game in town anymore.

    So what does that leave then? They have big name actors and a lot of marketing power. They also have the money to develop the kind of content delivery service that would make Apple wet its pants - and instead, they're just sticking with a doomed market and a flawed, short-sighted business plan. So cord-cutting will continue, the older demographic who still watch cable and avoid the Internet will shrink, and at some point they'll probably look back and realize that muzzling Hulu was a mistake.

    It's the same old thing, really - they don't realize that they're in the business of providing entertainment, not the TV business. And they have a lot of competitors who know how to provide entertainment more effectively than they do.

     

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  11.  
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    The eejit (profile), Oct 13th, 2011 @ 10:04pm

    Re: Re:

    Never work with the legacy businesses unless you want to FAIL HARD LONG-TERM.

    FTFY

     

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  12.  
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    sexydiverguy (profile), Oct 13th, 2011 @ 10:07pm

    We are Sorry

    We're sorry,the content you wish to view is not available in your country.

     

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  13.  
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    OCK, Oct 13th, 2011 @ 10:20pm

    haha

    hulu was great back in the day ... when torrents took more than 10 min to download... ive been cable free for almost 5 years now ... and even with out having a traditional internet connection for the past 3 months but instead using my sprint phone with 4g connection to download my torrents i can download tv shows in under 10 min (as a matter of fact i just downloaded 3 shows in the time it took me to write this comment using my cellphone)so long hulu and F U Cable companies

     

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  14.  
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    Anonymous Coward, Oct 13th, 2011 @ 10:29pm

    wow

    $2 billion, take the money and run. Hulu is a failure.

     

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  15.  
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    Anonymous Coward, Oct 13th, 2011 @ 11:22pm

    http://www.youtube.com/watch?v=6eFkx65ZhAE

    With games approaching photorealistic effects one has to wonder when Machinima will become big.

     

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  16.  
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    That Anonymous Coward (profile), Oct 13th, 2011 @ 11:29pm

    Re: Not just this

    No the cable companies are well aware.
    How else do you explain the monthly bandwidth limit caps, well other than them wanting to put off upgrading their systems. They want to kill any format competing with them that uses the net to get in. Look at what is happening with some of the carriers in Canada, limiting their customers to such a degree that NetFlix had to build an entirely new stream format so customers could get more than 2 things a month.

     

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  17.  
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    Anonymous Coward, Oct 13th, 2011 @ 11:33pm

    Condiditions

    Wasn't Comcast's buyout of Universal contingent on making content available to competing services, with Hulu being directly discussed? From techcrunch:
    “Comcast must relinquish its management rights in Hulu, an OVD. Without such a remedy, Comcast could, through its seats on Hulu’s board of directors, interfere with the management of Hulu, and, in particular, the development of products that compete with Comcast’s video service. Comcast also must continue to make NBCU content available to Hulu that is comparable to the programming Hulu obtains from Disney and News Corp;”

    Three company merger restrictions on the FCC’s release are also noteworthy, with regards to Hulu:

    Does not enter into agreements to unreasonably restrict online distribution of its own video programming or programming of other providers.
    Does not disadvantage rival online video distribution through its broadband Internet access services and/or set-top boxes.
    Does not exercise corporate control over or unreasonably withhold programming from Hulu.

    Seems like they might not be living up to these mandates...

     

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  18.  
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    anonymous, Oct 14th, 2011 @ 12:22am

    the execs you mention will become employed directly by the movie industries. lets face it, that's where all the 'yes men' and thick 'i cant think for myself, dont have any vision for the future' fucking idiots go, isn't it?

     

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  19.  
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    Jay (profile), Oct 14th, 2011 @ 12:26am

    Re: Not just this

    It also doesn't help that the Big Boys are killing off any innovation that makes their content more valuable.

     

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  20.  
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    Major, Oct 14th, 2011 @ 1:52am

    Re:

    Please MarksAngel and Mike write it "à la carte" have pity of those poor french people !

     

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  21.  
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    DannyB (profile), Oct 14th, 2011 @ 5:46am

    Re: Re: Re:

    > Never work with the legacy businesses

    Let's stop calling them legacy businesses.

    Call them what they are: dinosaur businesses.

    Powerful, but slow, lumbering dinosaurs. Roaring loudly. Unable to recognize the changing ecosystem. Unable to crawl out of the tar pit. Lashing out at anything within reach.


    > unless you want to FAIL HARD LONG-TERM.

    What? I'll have you know I am the subcontractor who makes the most popular handles used by the biggest name in buggy whips manufacturing!

     

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  22.  
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    DannyB (profile), Oct 14th, 2011 @ 5:49am

    Re:

    No, no!

    It's not because entertainment execs are dumb. It must be because of piracy.

    Yeah, blame Mike and call him pirate. It's all his fault along with a bunch of freetards that he controls.

    That is the reason people won't pay more for less. It's why they complain when we trample their rights on the mere accusation of piracy.

     

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  23.  
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    Anonymous Coward, Oct 14th, 2011 @ 7:08am

    My mom was majorly pissed off this week because a popular show she likes was pre-empted by overtime in Baseball. Never mind that there are a dozen sports-only channels, never mind that there's no reason we should need to work off channels any more (it's not like we're sending signals through the air any more), because the TV execs want things to just stay business-as-usual, she couldn't watch her show when she should have been able to. Little cuts like this will turn even entrenched TV watchers against them in the end.

     

    reply to this | link to this | view in thread ]

  24.  
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    Anonymous Coward, Oct 14th, 2011 @ 7:10am

    Re:

    Yeah, "give me billions of dollars for this property I fully intend to destroy as soon as I'm no longer holding the buck" is a pretty hard sell.

     

    reply to this | link to this | view in thread ]

  25.  
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    Greevar (profile), Oct 14th, 2011 @ 7:17am

    Take inspiration from the games industry.

    We need a service like Steam, for video. The ability to buy videos and download them over and over to any of your devices would be key in making it in the internet age. In addition, there would be community features like there are groups on Steam, which would provide a social facet to their business that they haven't leveraged yet. A news page that informs users of upcoming programs and new series that might fit in with your viewing tastes would be nice, like a custom feed telling you about stuff you might like. You would have the ability to track your favorite shows and schedule downloads so you don't miss anything. It would also be valuable to have a pay-as-you-go model and a "season pass". The season pass would give you access to an entire season of a show and schedule them for download onto your selected device (it should be a lightweight and cross-platform so anything from mobile to HTPC can use it).

    When all is said and done, you're not buying content, you're buying a service that makes that content more valuable to you.

     

    reply to this | link to this | view in thread ]

  26.  
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    BigKeithO (profile), Oct 14th, 2011 @ 7:48am

    Re: Take inspiration from the games industry.

    Sounds almost like something already out there... Netflix anyone? Add in the social features you've mentioned and you've pretty much got Netflix. Now just add in more relevant streaming options and we've got a winner.

     

    reply to this | link to this | view in thread ]

  27.  
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    hothmonster, Oct 14th, 2011 @ 7:51am

    Re:

    so they can cry about piracy killing their business after they drive all their customers away

     

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  28.  
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    hothmonster, Oct 14th, 2011 @ 7:52am

    Re: Re: Re: Re:

    Stop insulting dinosaurs.

     

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  29.  
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    MKR, Oct 14th, 2011 @ 8:02am

    People still use Hulu?

    I think the last time I went to Hulu was to watch an episode I missed of a show, and it was arbitrarily delayed by a week. Haven't been back.

    It's unfortunate too because Hulu could have been great if its owners didn't have a death grip on an outdated business model.

     

    reply to this | link to this | view in thread ]

  30.  
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    MKR (profile), Oct 14th, 2011 @ 8:04am

    Re: Re: Re: Re: Re:

    Oh come on, they have thick skin.

     

    reply to this | link to this | view in thread ]

  31.  
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    ComputerAddict (profile), Oct 14th, 2011 @ 8:29am

    Re: Not just this

    "They also have the money to develop the kind of content delivery service that would make Apple wet its pants"

    Simply Not true...

    MPAA revenue around 10 billion, Google Revenue around 9 billion, Apple Revenue 7.31 billion... and earlier this year it says Apple Money Vault topped $338 billion, more than Exxon Mobil, and the took the spot for most valueable company in America... I dont think apple is going to be tail-tucking to the MPAA anytime soon...

     

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  32.  
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    ComputerAddict (profile), Oct 14th, 2011 @ 8:30am

    Re: Re: Not just this

    especially if they numbers the MPAA reported for earnings use MAFIAA Math...

     

    reply to this | link to this | view in thread ]

  33.  
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    Travis, Oct 14th, 2011 @ 9:04am

    Pity...

    I'm canadian, and when I vacationed in the states and took advantage of hulu, instead of hotel TV, I thought it was a FABULOUS idea. It's such a pity that a legitimate alternative to cable TV is getting totally crapped on. Media moguls must live on another planet, nothing they do is winning them ANY fans, or ANY success.

     

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  34.  
    identicon
    Anonymous Coward, Oct 14th, 2011 @ 9:12am

    Reinventing Self....

    Back in the day, TCBY was one of the best frozen yogurt places around. It was huge, places everywhere....

    They kind of pittered out, closing up shops all around. I figured they were a goner.

    New places opened up, one of them being Cherry Berry. For our area, the concept was really cool. You walk in, pick whatever flavor of frozen goodie you want, and then put whatever toppings you want on it. You pay for overall oz's of whatever is in your bowl.

    The other day, my kid came home, and sure enough, TCBY started back up again, doing the same thing....with the same awesome tasting frozen yogurt.

    This is what people want, choice. Their own combinations. A La Cart. Other industries are adjusting.....

    Something the Entertainment industry should learn, before THEY are left behind.

    I want to be able to open an app on my phone, choose 'steak, mashed taters, green beans, and cheesecake' for one and it either be delivered to my home, or available for me to pick up, already paid for.

    I want something that will cook a real grilled cheese in the microwave.

    Maybe I need to go eat breakfast......

     

    reply to this | link to this | view in thread ]

  35.  
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    Allomancer (profile), Oct 14th, 2011 @ 9:19am

    Re: Take inspiration from the games industry.

    You're right that the social stuff is not being fully utilizes by anybody for video, but the rest of what you mentioned is being done by Amazon with their Instant Video (Apple, too, although I'm not as familiar with the way iTunes does video). The main problem with Amazon is the pricing. For people who are used to paying a fixed subscription to get access to large amounts of content, either with cable or stuff like Netflix, paying $3.00 per episode of a TV show is pretty steep.

    And with movies, the fact that it's still more expensive to rent a movie online than it is to go out and get an actual disc from Redbox or Blockbuster is ludicrous. I'm sure they think it's adding value for convenience, but for me that doesn't come close to making up for the fact that it costs them almost nothing for the distribution of the content when.

    Steam has been wildly successful for a number of reasons, the social aspect of that is certainly a huge part, but no less important is the pricing. While the default pricing for games on Steam is in line with retail for the most part, they have sales going on all the time that give ridiculously good deals. And these sales are obviously working for the publishers of the games, I've hear plenty of devs talk about how their revenue (revenue, not units sold) spikes when they participate in one of those sales, and even when the sale is over they still have increased revenue compared to before.

     

    reply to this | link to this | view in thread ]

  36.  
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    hothmonster, Oct 14th, 2011 @ 9:37am

    Re: Re: Re: Re:

    "What? I'll have you know I am the subcontractor who makes the most popular handles used by the biggest name in buggy whips manufacturing!"

    You mean this: http://www.buggy-whips.com/ is you? Gratz on almost 10 billion hits

     

    reply to this | link to this | view in thread ]

  37.  
    identicon
    hothmonster, Oct 14th, 2011 @ 9:54am

    Re: Re: Take inspiration from the games industry.

    http://www.giantbomb.com/forums/steam/2112/gabe-newell-gives-some-insight-into-steam-sales/482542/

    Steam sales are really interesting. They don't just cannibalize your future sales market, i.e. everyone who was going to buy your game, in the future, buys it while its on sale. It will actually, due to the social aspects of steam and gaming in general, push sales up for a long time after the sale has ended. The have some really interesting data floating around out there for people who are interesting in sales and marketing and this kind of stuff.

    Certainly this could carry over into the digitial video market. For example, offer the first season of Dr. Who for a dollar. You will get a bunch of dollars you wouldn't have otherwise got and some new fans of the series who will snatch up more seasons.

    There are a lot of ideas that marketeers are carrying over from the brick and mortar experience into digital stores that are flat out wrong and need to be reevaluated. Amazon, itunes, et. al. have a chance to offer products to millions of people with next to no overhead but are not taking advantage, largely due to publishers I am sure, the new methods to reach, engage and create repeat customers.

    Valve is doing a lot of interesting research beyond actual video game design and creation that a whole lot of industries should but are not paying attention to.

     

    reply to this | link to this | view in thread ]

  38.  
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    AJBarnes, Oct 14th, 2011 @ 10:13am

    Re: Re: Not just this

    That's why you should be in the transport business, or the content business, but not both!

     

    reply to this | link to this | view in thread ]

  39.  
    identicon
    gfk, Oct 14th, 2011 @ 4:13pm

    Hmmm

    Not to rain on your big-media-is-evil parade here, but this article offers a somewhat different narrative of the decision:

    http://thewrap.com/media/column-post/why-hulu-got-yanked-auction-block-31854

     

    reply to this | link to this | view in thread ]

  40.  
    icon
    The Devil's Coachman (profile), Dec 21st, 2011 @ 1:07pm

    Re: Re:

    Why would anyone pity the cheese eating surrender monkeys?

     

    reply to this | link to this | view in thread ]


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