Media Analyst Calls Hulu 'Anti-American' For Providing Free Content

from the apparently,-she's-never-watch-TV dept

We see all sorts of confused analysis when it comes to how “free” works in economics — which goes back to our assertion that the human brain tends to run into a mental block when it encounters a zero and rather than recognize the rest of the economic equation, it just pops out an error message. That’s the only explanation I can find for the so-called analysis by Media Metrics’ Laura Martin of how Hulu is “anti-consumer, anti-media employees, and even anti-America” and supposedly putting $300 billion worth of market value “at risk” (thanks Ben for sending this in).

Wait… what? Anti consumer? Offering consumers more of what they want at a better price is anti-consumer? How?

Anti-media employees? Offering a better product that can be better monetized through smarter means should be good for media employees.

Anti-America?!? How? Martin’s claim is apparently “Media companies will lose a lot more revenue by giving shows away for free online than they will from pirates.” Oh really? How does a person like Martin get and keep a job if that’s her analysis? Apparently she’s never heard of a little something we call “television” which has made a tremendous amount of money for years giving shows away for free and supporting it with ad dollars. Furthermore, the idea that media companies stand to lose more by competing with piracy by offering something better is the most twisted economic analysis we’ve heard in a long time (and, boy, we’ve heard some twisted economic analyses over the years). The fact is more and more people were moving to online to watch shows anyway. Pretending that didn’t exist is economic suicide. Offering a better experience allows the networks to compete.

On top of that, Martin apparently hasn’t looked at much of the actual research out there if she thinks that online shows are somehow cannibalizing TV revenue. In fact, most studies have found the opposite. They’ve found that putting shows online for free helps make the audience more engaged and convinces more people to watch the shows on TV, because if they miss an episode they can just catch up online.

It’s hard to fathom how any media analyst in this day and age can actually think that using “free” as a part of your business model is not just a “bad idea” but “anti-consumer” or “anti-America.” If you don’t understand basic media economics, how can you be a media analyst?

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Companies: hulu

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Comments on “Media Analyst Calls Hulu 'Anti-American' For Providing Free Content”

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39 Comments
Anonymous Coward says:

There have certainly been times where I’ve first watched something online and then watched the new episodes on TV once I was caught up. Sadly it was before there were any legitimate ways to get episodes online, but would the networks prefer that I hadn’t done that and then never started watching the show?

Ima Fish (profile) says:

My guess is that Laura Martin has never used Hulu so she has no idea that it’s based on advertising and that it’s a pretty reasonable alternative to piracy. It’s certainly easier to use for most people to watch their shows than bittorrent.

Of course it also appears she’s as ignorant as a brick too. But that sort of goes without saying. Hulu did not put $300 billion worth of market value “at risk.” The declining economy and the consumer did. If consumers are not willing to pay money for broadcaster’s content, the market value is worth exactly zero and it’s no one’s fault at all. Anyone has a right to sell nearly anything, but no one has a duty to value it or buy it.

Jason says:

Re: Re:

I’m sure she also doesn’t realize that Hulu represents a significantly better platform for advertising. It’s more targeted, it’s less annoying, and just by being more consumer-friendly I believe it’s more effective. Obviously, since I don’t have a Hulu rate card, I can’t know their CPM and the like, but the bottom line is I actually end up watching the commercials more.

I can’t remember the last commercial I watched on TV. But with Hulu, they’re only 15-20 secs long, and there is no benefit to “changing the channel” because whenever I come back to the show, I’m right back at the same spot where I left off – commercial and all. I mean there’s really not even enough time to pee. More often than not, I watch most or all of the commercials when I watch a show on Hulu.

Now, tell me again: How is that going to destroy the industry?

Anonymous Coward says:

Superficial Analyst Presents Superficial Analysis: Sky is Cloudy and 110% chance of sunshine.

Right, and Perhaps Laura Martin doesn’t see how people are changing their consumption habits, as it pertains to “entertainment”.

Point is there’s a bigger problem and what was once considered “entertainment” is no longer entertainment, or has been incredibly overvalued. I tend to think that Hulu folks understand this seismic change, and are the best prepared for it.

What’s Laura’s alternative? Probably the same as what happened with Entertainment Mogul Six Flags Theme Parks last week.

That’s a great backup plan with lots of thought put into it.

Rob R. (profile) says:

But Hulu isn’t a site that is just generating ad dollars…….it’s an alien ploy to soften our brains to they can be easily eaten!

It’s also a great example of how to make a shitload of cash from giving things away for free using very expensive servers, very expensive bandwidth, very expensive advertising on (free) broadcast TV.

The greedy will never understand that you make more like this than you do trying to charge for every microscopic bit you can. F*cktards would indeed be the correct term.

Researcher says:

Unsubstantiated?

I wondered who the H she was so I did a little digging. Stanford. Harvard MBA. Years of experience as an analyst. Why in the world would she write such crap? After a little more digging I found where she questioned the Hula model. Seems like a valid question and criticism, even if it’s wrong. Also where she made some good and some bad stock calls. But I can’t find anything verifying she made the “anti-*” comments except the gossip site listed in Mike’s blog. IF she wrote the crap claimed, where is it?

I have serious doubts it’s even true.

No, I have no connection to her. No, I didn’t go to Harvard or Stanford. No, I don’t think the media companies have a clue. Yes, I do think truth matters more than rumors…

DanC (profile) says:

Re: Unsubstantiated?

I found the report, Disrupting the TV Ecosystem on the Media Matters website, and the anti statements are true. The report is here.

From the report:

“Putting high quality, professionally produced TV content on the web for free may turn out to be anti-consumer, anti-media employees and even anti-America.

In the battle of piracy vs free, piracy is the lesser of two evils.”

Jason says:

Re: Re: Unsubstantiated?

Oh yeah?? Well her underlying logic is even worse:

– “The logic of “I’m having trouble getting paid for my content, so let me give it away for free”, probably drives Wall Street to allocate capital to other industries.”

– “Although listeners may view user-generated and premium
music to be substitutable, this does not apply to professionally produced TV content. There is no user-generated content that is a true substitute for long-form premium TV content. Therefore, premium TV content (ex: Hulu)can only be cannibalized by itself and these companies need to protect their pricing power if they want to ensure funding for their next new series.”

Oh and this GEM:

– “Because cost per thousand viewers is the predominant payment method for TV content today, this measurement disparity hurts economics.”

So to sum up:

TV’s not going to be TV anymore, and I don’t know how they’re going to measure it, and I think Wall Street is gonna be too stupid to get it, too.

RIDICULOUS!! If anything, HULU is quite possibly poised to be the most measurable, most focused and most justifiable of TV advertising expenses ever.

Natanael L (profile) says:

Re: Re: Re: Unsubstantiated?

“The lack of industry leadership championing economic returns threatens consumer choice and survival of niche TV channels.”

The lack of dominating giants making the rules will give less space for niche TV channels and making it harder for indipendent producers to create stuff and distribute their work in indipendent channels.

Industry leadership means big TV networks. Economic returns means money to then big TV networks. Less giants and less money directed to the giants will leave lesser space to small TV networks according to them, because like with the internet – if there are no big sites where everything are that are moderated by internet giants, then there wouldn’t be any small sites.

Yeah, sure. There absolutely weren’t several millions sites already before Google (who actually are a search engine rather than a public directory with 100 sites.)

… Wait a little now, what did just happen here…!?
Somebody’s logic just broke.

They’re talk about incentives are stupid.

Anonymous Coward says:

Re: Re: Unsubstantiated?

“DanC:
I found the report, Disrupting the TV Ecosystem on the Media Matters website, and the anti statements are true. The report is here.

From the report:

“Putting high quality, professionally produced TV content on the web for free may turn out to be anti-consumer, anti-media employees and even anti-America.

In the battle of piracy vs free, piracy is the lesser of two evils.””

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

FAIL!!! FAIL!!! FAIL!!! FAIL!!! FAIL!!! FAIL!!!

Every time I hear that I get more eager to wipe my Vista partition on my dual booting laptop (I am running Ubuntu now)!

I swear that I’ll never pay for any media again and go 100% Creative Commons! (And donate to the CC media creators I like of course to keep the eco system alive)

Bob says:

Hulu is commercial

1) Hulu already has commercials before most if not all shows

2) By providing “exclusive” content for a time, and then taking it away, you encourage people to pay for it (buy/ rent the DVDs) Its called creating scarcity, but we can call it the HBO model. Its why they serve some of the content On Demand, but never enough to finish the season you’re watching. Lots of shows have started to use this model. It’s Always Sunny In Philadelphia for example, runs shows on FX and Hulu for a limited time, and then make it harder to get, forcing people to buy, rent, or maybe pirate it to watch it afterwards.

Sailingmaster (profile) says:

Wow...

Where’s Dan Aykroyd and the SNL news to tell Laura Martin: “Laura, you ignorant slut.”

Broadcast television has been free and supported by advertising for 60 years. Nice to know that all that time they were being anti-American, anti-Consumer and anti-Media employees.

Edward R. Murrow would have a field day ripping apart these corporate shills’ agenda driven faux analyses. Unfortunately, there is no one today in the media with the stones, objectivity and reputation of Ed Murrow.

clearSam (profile) says:

whatever...

this media analyst is clearly an idiot if she thinks that Hulu is giving away ANYTHING (including Shows) for free !

she should probably try and google these two letters: ad
and for an advanced topic i suggest she looks up: internet traffic.

ive read somewhere that there would come an time where idiots are in charge, i think we are almost there.

Druid Man (profile) says:

Craven Maven

Here is Ms. Martin’s CV. A real Bush era babe. She no doubt is the sole person at Media Metrics and produces “research” for companies that need figures that support their 20th century business models.

Laura Martin is the Founder and CEO of Media Metrics, publishing equity research on large entertainment companies, such as Disney, Time Warner, News Corporation, CBS, Viacom, Google, Yahoo! eBay and Comcast. She is also president of Capital Knowledge, a financial consulting firm providing capital markets advice and valuation services to senior management teams. In 2002 she was appointed Executive Vice President of financial strategy and investor relations at Vivendi Universal in Paris, charged with formulating and articulating company strategy to analysts and shareholders. Beginning in 1994, she worked on the “sell side” at Credit Suisse First Boston as senior media analyst, covering the largest entertainment and cable stocks. She was nationally ranked by Institutional Investor each year between 1999 and 2001. She began her career in investment banking at Drexel Burnham Lambert and in 1990 became a portfolio manager at Capital Research & Management, managing a $500 million media-equity portfolio. She received a bachelor’s degree from Stanford University and graduated from Harvard Business School.

Anonymous Coward says:

Technology Giveth

And Technology taketh away.

There wasn’t any such thing as a “media business” until technology came along that made it possible and useful. Progress doesn’t stop, just because someone’s build a business on a current state of affairs.

Technology has obviated the need for many of those businesses, at least as they established themselves “back when”.

They can move or die. Legislation is just a stop gap. Technology waits for no business.

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