Is Hulu About To Find Out That There's Always Somewhere Else To Get Content Online?

from the killing-the-goose dept

Wanderlust wrote in to point out the rumors doing the rounds today that Hulu is getting ready to launch a paid subscription service, something that’s popped up before. Apparently Hulu is looking to offer the five most recent episodes of a show for free, then will charge $10 a month for access to older episodes. There aren’t a ton of details, so it’s not clear exactly how the plan will play out. But we can say this: unless Hulu is adding some real value for users, and not just putting currently free content behind a paywall, it’s doomed to failure. It’s pretty clear that some of Hulu’s corporate overlords think all of its content should be behind a paywall. But erecting a paywall will simply drive Hulu users to unauthorized downloads and streams, delivering those content providers absolutely nothing. All too often these paywalls are based on the idea that once users have nowhere else to go, they’ll start paying; the reality is, though, there’s always somewhere else to go.

Hulu’s success thus far has been by attracting users with a good choice of content presented in a good interface, reflecting something of an understanding that the way to compete with free, unauthorized content is to offer users something better. It’s already started to undermine some of its success by blocking certain browsers in an attempt to force users to only access its content (and its advertising) through means of which it approves, and the paywall represents yet another step towards replacing a product that’s better than unauthorized content with one that’s worse. In any case, when online streaming TV shows are already pulling in some high ad rates, does it make any sense at all for Hulu to start throwing up paywalls?

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Companies: hulu

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Comments on “Is Hulu About To Find Out That There's Always Somewhere Else To Get Content Online?”

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57 Comments
bob says:

I’d pay $5/ month to get a nice legal convenient stream to my roku/wii/whatever. It seems like they are going in a different direction though.

Depending on how far back stuff goes I think this could make a nice market for them. Certainly they’ll compete with free. But $10 a month for never buying another TV DVD might appeal to some people.

The appeal is similar to Netflix’s instant watch. Certainly I could go elsewhere, but it’s convenient and cheap.

I don’t think piracy will ever eliminate this sort of behavior. I think it’s normalizing internet TV. As production costs go down, specialized shows will pop up and consume viewers. The danger isn’t losing the short-term money. The danger is losing the production monopoly.

FatGiant (profile) says:

Well, since Hulu doesn’t want me to be their client, me and several other million users, will just use THE OTHER ways.

And Hulu and Pandora, can go the way of the Dodo, and we’ll never miss them…

Carlo Longino, you are aware that not all of your readers are from US, aren’t you? And that those readers, couldn’t really care less about Hulu?

Thanks.

Mike Masnick (profile) says:

Re: Re:

FatGiant,

Carlo Longino, you are aware that not all of your readers are from US, aren’t you? And that those readers, couldn’t really care less about Hulu?

I’m not sure I understand this complaint. We write about things like Canadian copyright law, the UK’s Digital Economy Bill, internet filters in Australia… and yet our US readers don’t complain that they “couldn’t really care less” since they’re not in those countries.

In the meantime, even if we do have many readers from outside the US, we are a US based site and the majority of our readers ARE from the US. Are you suggesting we only write stories that apply to everyone around the world?

As for why Hulu and Pandora aren’t available outside the US, I wouldn’t be so quick to blame those companies. It’s the rightsholders who are preventing them from doing so.

FatGiant (profile) says:

Re: Re: Re:

No, it wasn’t actualy a complaint. Just didn’t see any mention to that in the article. I know you guys cover it for your readers, all of them, not only the domestic ones. But, every time I read Hulu, I can only see: “You are not good enough to access our site”.

And Sir, I don’t really think it is NOT their fault. I don’t see the content owners, only them. I am not turned off by the content owners, I am segregated BY HULU. And yeah, I don’t like it.

Hulu and Pandora may even be lousy and probably if given access we the rest of the world, could not even use it. But the fact that we can’t, doesn’t sit well.

So, yeah, we blame them, and I will UNTIL I’m allowed in.

My oppinion of Hulu, Pandora and all those other segregationist sites is the same of any other racist or xenophobe one.

And I’m not alone on that.

If they don’t like it, too bad…

Hulu = Racism

Anonymous Coward says:

Re: Re: Re: Re:

1. Not-American is not a race. They may be bigoted against people who are not American, but they cannot be racist against people who are not American simply on those grounds (they may actually be racist, but this doesn’t prove it).

2. I agree that it is absolutely Hulu’s fault that they will not show content outside of US borders. They got in bed with “The Badguys”; this is what happens. If they wanted to have any business, they had to make a deal with these folks. Well they did, but even if they felt like they were choosing the lesser of two evils before, what is happening now? The lesser of two evils is still evil.

Anonymous Coward says:

there will be not other legal places to go online. if you are willing to break the law there is always somewhere to do. then again if you are willing to break the law you can always have lots of money just take it from the bank. sorry but hulu is offering unique content you cant legally get anywhere else except at broadcast. cwf+rtb, no?

Anonymous Coward says:

Re: Re: Re: Re:

I think you missed the point of his comment. It’s not about the legality, it’s about how people view the law.

People view anti theft laws as just because everyone believes in property rights, but not everyone believes in monopoly rights.

Naturally, it goes to follow that a lot of infringers would frown upon a bank robbery.

Anonymous Coward says:

Re: Re: Re: Re:

digital is not a scarce good. what is on the digital is. you are making the masnick mistake looking too closely. the infinite distribution isnt where the issue is it is with the very finite production. market price is set on that not on the distribution. where are you going to get the hulu stuff for free legally?

Sneeje (profile) says:

Re: Re: Re:3 Re:

Well, and we can debate back and forth about ethics and scarcity until we’re blue in the face.

However, one other issue that gets ignored is the issue of people’s perception of cost. The problem with paywalls that cover a *fractured* set of content is that people cannot easily perceive or mentally control their entertainment budget, especially when their desire is to share the same experiences as their peers. This is something the entertainment industry wants you to ignore.

In other words, I don’t want to be locked in to a position where I can no longer talk with my friend about the show on the stream that he pays for and I don’t. Ala carte is more expensive if I have to pay for all paywalls.

GET THIS THROUGH YOUR HEAD–consumers DON’T WANT LOCK IN!

MadJo (profile) says:

Re: Re: Re:2 Re:

So, what you are saying that even though the medium allows for infinite copies, the content that’s on that medium is scarce? That I don’t follow.
Let’s say for example that Hulu only offers one episode of one series at the moment.
If the content is scarce, how is it possible that both Person A and Person B can watch that episode from that website?

Yes, content creators should be paid for their work, but as the distribution reaches infinity, you only have to set a very low price.

Look, all Hulu has to do is offer a simplified easy way of watching content, because despite what you might think, piracy isn’t that easy, though it’s getting there. But you have to find the content, hope it’s the right content, risk viruses, hope that you have the right codecs, the right unpacking tools, hope that enough people are sharing it. etc etc etc.

For a low price* lots of people are willing to forgo the piracy route, in favour of the more legal way.
Sure, not everyone, but large parts of the populous is more than willing to pay for content if it was reasonably priced*

*To be determined

The Infamous Joe (profile) says:

Re: Re: Re:3 Re:

*To be determined

It’s about $10/month. The cost of a VPN service to encrypt your data. That right there proves people *are* willing to pay for content, because even those people pirating are willing to pay a monthly fee to continue to do it.

So, if the content creators were smart, they’d offer an all-you-can-eat service for that price.

Of course we both know they aren’t smart.

Anonymous Coward says:

Pandora offers quite a bit of value in my opinion and I gladly pay for it. Theres a free app for the iPhone that lets me listen to it in the car which is awesome, and it helps me discover new music, also awesome.

If Hulu let me watch content (commercial free) on my TV via a game console I would likely buy that too. Netflix has the right idea, they just need more instant content 🙂

Chronno S. Trigger (profile) says:

Re: Re: Re:

You don’t ask for Lamb of God, you ask for songs that you don’t know that you may like based off of a list of songs you give them. Sometimes you get crap, sometimes you get gold. Same as buying CDs.

Am I the only one that does not get ads in Pandora? I wouldn’t actually mind an ad or two every 5 songs. I only left radio because they went above and beyond that.

On topic: I can’t see this being a problem for Hulu. They still provide a service that most people will use. Not many people want to watch reruns, only the most recent episode is important. Hulu just figures they will get the true fans to pay. As long as they do it right. Remove all commercials for payed episodes.

Danny (profile) says:

Why I didn't go to Hulu

I watched an episode of CSI a year or so ago on Hulu. It was a great experience; I didn’t mind that it forced me through commercials; that seemed like a fair trade to me.

Then, I had two bad experiences, neither is Hulu’s fault.

1. I wanted to keep watching CSI on Hulu, and found myself on a business trip to Europe shortly after the first experience. I tried it from there, but Hulu reported that their license didn’t permit viewing outside of the US. I am sure that was CBS’s doing, not Hulu’s. They both lost my eyeballs, though.

Month’s later I found that CBS removed their content from Hulu. No problem, I figured, I’d go to the CBS site and watch. Did that and found CBS no longer offers episodes online – they offer short previews. That doesn’t interest me; I want full episodes.

Note that I am not fighting the advertising model online. I accept it. And note that when I watch CBS shows via DVR I always fast forward through commercials (cause I can). So, it have no idea what CBS is thinking here.

2. Last week my wife and I sat through an episode of Criminal Minds on the DVR (skipped commercials, of course.) When we got to the end, I find it is a two parter, but my wife informed me she had already deleted part two as she had previously seen it.

I grumbled, headed to the computer, and went searching for part two to view. It wasn’t at Hulu or the CBS site (just damn previews), so I googled the episode title and found LOTS of services that would let me watch “for free”. Of course each of these services has a nasty business model that requires me to exchange lots of information with a company I’ve never heard of, or download proprietary viewing software that seemed rather convoluted and risky.

So, I went to iTunes, paid about $3 and watched my episode.

I guess CBS made a cut of that, so they are probably happy. And so is Steve Jobs.

But somehow there must be a cleaner way for these guy to monetize what they are doing; and there must be a way for them to do so without getting me so pissed off.

Anonymous Coward says:

I really enjoy hulu and hope they do not start charging. I am currently watching all ten seasons of SG-1 for free. A few 30 second commercials do not bother me at all, the overall time of a 1 hour show is still 44 min. They could even put standard 2 to 3 min of commercials and I would still watch. you can get all the content in seconds without log-in or software or paying for anyting. I would rather buy the season of a show or a movie on DVD then pay money online to watch it on my computer or screw with hooking my computer to the TV. I have never been able to find a decent web site that shows broadcast tv for free except hulu. I will not watch web shows. There is a reason people get paid to do shows, they are good at it. web shows i have seen all suck. Increase the commercials and keep it free.

Dave (profile) says:

I'm not ready to dismiss this yet.

I understand the suggestion that Hulu isn’t going to get people to pay for something they can get for free — or that they’re already paying for one way or another. But Hulu could still make this work if they do three things:

1.) Make the paid version commercial free.
2.) Allow set-top box makers (Roku, Boxee, etc.) to access the Hulu subscription service.
3.) Offer enough new content to differentiate itself from Netflix.

Because a set-top box that offers Netflix and Hulu for a combined $20/month — plus a variety of quality sports packages for extra — would be a very compelling offering for many people. The only question is whether big media is willing to make that step. Sadly, I suspect they aren’t, because they have so much money invested in the status quo of cable and satellite TV, and they fear that making this move would cost them too much money — short-sighted, but typical.

This is also why I think Apple TV is still a “hobby.” If Apple developed Apple TV into something really compelling, they would get a nigh-unbearable amount of push-back from cable & phone companies, who are both ISPs and TV providers, and Apple TV would 1.) cost them TV customers, and 2.) fill their pipes with video they have no control over. But there are way too many issues surrounding that, like the need for more broadband competition.

Jim (user link) says:

International

It may not be hulu’s fault that they have to block users outside the us. It may not even be the rights holders’ fault. Content rights are routinely split by territories (And channels). If, for example, a content owner already sold all rights to a show to a compay in France, then they would not be able to license the show to hulu unless hulu agreed not to show it in France. They are probably keeping it us only in order to avoid international issues all together.

My own company often gets blamed for stuff like this when it is completely beyond our control. Most people are nice about it once we explain. Some seem to think it’s a Yankee plot. Believe me, I’d be happy get money in any currency.

Anonymous Coward says:

I would pay $10 a month (or even more) if I could download videos and watch them at my convenience on a device of my choosing, but why would I pay for access to streaming video on Hulu when so much of that content is already available for free online, mostly through the network-owned websites?

Some of the TV shows I buy from Itunes take me a year to get around to watching, at my convenience, on my IPOD or burned to a DVD. I’m not interested in tethering myself to a PC to watch a streaming video – which is why Hulu isn’t all that interesting to me even though it’s free. Charging for the service seems like a really dumb idea.

in3rtia (profile) says:

Um...

Hulu isn’t charging for anything that they currently offer. Hulu will soon offer shows older than the ones that they currently offer, which for most shows is the last five episodes. Anyone who currently enjoys hulu, can continue watching hulu free of charge. If you want access to say, the first 5 seasons of Lost or whatever, you can get all that for $10 (at least that’s how I understood it). Not really a paywall if you are paying for service above and beyond what they already offer, is it?

Anonymous Coward says:

Re: Um...

I think people are complaining about paying for a service that still has ads. But people already pay for cable TV, visit websites with ads even though they pay for internet, and watch shows/movies with blatant product placement (Converse shoes! Vintage 2004!). I don’t get why they are drawing the line here…

Alan Gerow (profile) says:

Re: Re: Um...

When you’re paying for Cable TV, you’re really paying for the access, not the content. In other words, you aren’t paying SpikeTV with your Cable subscription, you’re paying Comcast/Cox/whoever. SpikeTV has to pay their bills with ads. The service & content are separate, you pay for one, and advertisers pay for the other.

Same with Internet access. Techdirt doesn’t get a cut of my Comcast Internet bill.

But, with Hulu, you’re paying for content, and as such that content should be free of ads. Either ads pay for the content, or my subscription does.

What you should really compare it to is newspapers, where you pay for the paper and still have to flip past pages and pages of ads. But, you see how well the newspaper industry is doing these days.

Alan Gerow (profile) says:

The most entertaining bit is that the $10 subscription only counts for FOX, NBC, and CBS shows. Hulu is releasing an iPad app, while CBS has already released an iPad app that gives away all of their shows for free.

So, 1/3 of the content behind Hulu’s proposed paywall is already being given away for free, legally.

So really, you’re paying $10/month to get old shows from FOX & NBC.

ECA (profile) says:

2 things happening here.

there are 2 things happening here.
1. Hulu isnt getting enough companies to advert on there site.
2. the contracts Hulu signed are STUPID, and give to much control to the corps.

The corps dont understand what is going on. They dont understand the amount of bandwidth and Storage needed to broadcast Videos.
They are Pulling back and trying to do it ON their own. And it sucks.
They are giving limited access and Special drivers and special players. lets just say CBS and the olympics, and you should know what I mean. It was Garbage.
The corps also want the money from advertising.
The corps dont see that we would patronize 2-3 sites to get All of the shows we like, IF they would put them on the net. Going to 10-20 sites to find what you want is Stupid.

So it comes down to a game of Who will show the shows.

Captainhero (profile) says:

its not that difficult

I wanted to try hulu, cant cos im in the uk 🙁
Same for amazon, etc etc. If I use a vpn or proxy then the connection speed sucks so when I want to watch a show, fringe, heroes etc I use fastpasstv. Now why cant the big media companies make something like this. I would happily subscribe to this site so the corps get their cut as everything I want to watch is in one place. I dont wanna be a “freetard” but they are making me into one!
That is all.

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