Time Warner Eyes Hulu Stake, Wants Service To Remove Current Seasons Of Shows

from the don't-innovate-too-much dept

We’ve discussed for years now how Hulu is hamstrung by the fact that it’s owned by the traditional cable and broadcast industry. Owners 21st Century Fox, Disney and Comcast/NBC have gone out of their way to ensure the service is never too disruptive — lest it hurt the traditional cable cash cow. And that’s been the cable industry’s mantra for years now — crow ceaselessly about how you’re “innovating,” while simultaneously trying not to innovate too much, lest your customers realize your legacy TV service is absurdly expensive, inflexible, and outdated.

As the industry has slowly realized that it can no longer just pretend cord cutting doesn’t exist — things have improved slightly, with Hulu making a renewed effort to invest in original programming and dramatically broadening its content catalog to better compete with Amazon and Netflix. The company has also listened to consumer complaints and now offers an ad free version — while placing fewer ads in the ad supported option. Hulu is also attracting new investors, with reports that Time Warner is looking to give a $2 billion cash infusion in exchange for a 25% stake.

But while Time Warner isn’t making it a condition of the deal, the company is making it clear that it would like to see Hulu pull current seasons of shows in a misguided belief that it can turn back time:

“Time Warner believes that the presence of full, current seasons on Hulu?or anywhere else outside the bounds of pay-TV?is harmful to its owners because it contributes to people dropping their pay-TV subscriptions, or “cutting the cord.” In the discussions about taking a 25% equity stake in Hulu, Time Warner has told the site’s owners that it ultimately wants episodes from current seasons off the service, at least in their existing form, although that is not a condition for its investment, according to the people familiar with the discussions.

The problem is that Time Warner would join Comcast in sharing the delusion that you can be both simultaneously disruptive and innovative on the streaming side, while still magically preventing traditional cable customers from noticing and cutting the cord. Comcast was barred from meddling in matters of Hulu management as a condition of its acquisition of NBC, but it’s a condition Comcast largely ignored. It’s also a seven year condition that will expire shortly after Time Warner seals its new ownership stake, meaning a double dose of myopic, backward-looking leadership at Hulu at precisely the wrong time.

Though many in the insular cable industry ecosystem like to pretend otherwise, it’s simply no longer a debate: consumers are increasingly cutting the cord and migrating to cheaper, more flexible viewing options. Traditional TV customers get 194 channels, but they only watch, on average, about 17 of them. 16% of consumers cut the cord last year, while 23% of consumers engaged in “cord-trimming” (reducing their overall cable package) in some way. 57% of those asked, unsurprisingly, say that price is the biggest reason they’re looking to shake things up.

It’s not an enviable position for the traditional TV industry to be in. To seriously combat cord cutting, it needs to offer a more flexible product at a lower cost — something that (with a few “skinny bundle” exceptions) it absolutely refuses to do. What we get instead is turf protection (broadband usage caps), a boat load of denial and failed “me too” services like Comcast Streampix that, thanks to fear of cannibalizing the legacy cash cow, are neither here nor there. The problem is, if Hulu isn’t willing to offer what consumers want, Netflix, Amazon, or some other company certainly will.

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Companies: comcast, hulu, time warner

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Comments on “Time Warner Eyes Hulu Stake, Wants Service To Remove Current Seasons Of Shows”

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41 Comments
JBDragon says:

Re: Re:

Cut the cord, then cut HULU for not delivering either. Quite frankly, I see no reason to pay for HULU if you don’t have to. Install a Antenna like I do and get a lot of stuff for FREE legally. There’s a number of DVR options also, from TIVO, to Tablo, and SimpleTV, to ChannelMaster with has no service fee at all. All have their Pro’s and Con’s.

Or just leave them period. Be done with it. Netflix Original content list is growing and growing. Maybe instead read some books. You rent out ebooks from your local library and do that from home. Or go there and rent out some DVD movies, or Audio books, etc all for FREE. I was just looking and you can rent out Chromebook Laptops. You pay for it with Taxes, why not use it?

Why keep playing their games? Laziness? There’s a number of things you can do to save money and still have a lot of stuff to keep you busy. Maybe less TV is a good thing.

Anonymous Coward says:

Re: Re: Re:

Not everyone has access to such a super-great library, you know. It’s been a while since I set foot in my local library, but from what I remember, they had VHS tapes and a few DVDs, but no laptop rentals. They had a sizable bank of desktops that you could access with your lib card or a special internet-only card. Access is free if you live in certain areas, outside of those you have to pay.

tqk (profile) says:

Re: Re: Re: Re:

Not everyone has access to such a super-great library, you know.

That is sad, yes. Where I used to live, a library card cost ca. $30 per year. Where I live now, it’s free, paid for by taxes. When you can’t afford it, you can still use what they have but you’d be stuck in the library doing it.

MBAs again, I assume. Everything must be able to cover its own cost on its own, or it gets cut. That kind of thinking gets us all the annoying “below the line” charges madness.

DannyB (profile) says:

Hey Time Warner / Hulu, here's a free clue!

Free clue for the clue challenged.

I’m sure I am not alone in saying that, for me, if it isn’t on Netflix, Hulu, Prime, etc, then IT DOESN’T EXIST.

I don’t care what your show, episodes or movie is. I won’t miss it.

There a million and one ways I can fill my time. And not just in front of the TV. In addition to the above, I also use PBS, TED, YouTube and others. Thus I often watch more educational or just plain better content than whatever you are offering. But it doesn’t matter if what you have is better. It simply is invisible to me. It doesn’t exist.

I want to watch it on all of my devices. TV, Computer, phone, tablet, etc. When I want. Where I want. And without cable TV.

Anonymous Coward says:

Re: Hey Time Warner / Hulu, here's a free clue!

I’m sure I am not alone in saying that, for me, if it isn’t on Netflix, Hulu, Prime, etc, then IT DOESN’T EXIST.

You’re most certainly not alone. I feel exactly the same way.

I signed up for Hulu’s ad-free plan precisely so I could watch current season episodes. When that option disappears, I’ll weigh whether a continued subscription to Hulu is still of value to me, and most likely I’ll decide it is not and cancel it.

But, what is most certain is this: I will not sign back up for cable TV services. Under any circumstances. EVER.

My decision to cut the cable TV cord a few years ago was PERMANENT.

Anonymous Coward says:

Re: Re: Hey Time Warner / Hulu, here's a free clue!

That is a bit harsh. While hatred of cable is near universal, the truth is that every single one of us would sign up if they offered a product worth the price. Cord cutting is not about leaving cable, it is about getting the most value for our money. If cable started offering deals and content that rivaled streaming services, most people would consider it.

Sure you might never, but people as a whole will come to pay if they can get more value from that. Then again cable has always been about avoiding competition, so this will almost certainly never come to pass.

DannyB (profile) says:

Re: Re: Re: Hey Time Warner / Hulu, here's a free clue!

While one might argue that they would go back to horse and buggy if they offer a product that is worth the price, there is more to it than just the price.

The fact is the automobile is vastly superior to the horse and buggy in many ways. Even if the horse and buggy were vastly cheaper (eg, worth the price), it would not appeal to me. And similarly, neither would cable TV.

My break with cable TV is permanent. Just like my ‘break’ with Microsoft products. If it could change to become what I want, then ok, but there’s no way that can ever happen.

In order for me to go back to Cable TV, it would have to have morphed into something entirely different which is equal to or better than the internet services I use now.

tqk (profile) says:

Re: Re: Re:2 Hey Time Warner / Hulu, here's a free clue!

The fact is the automobile is vastly superior to the horse and buggy in many ways.

Sure, but they’re also vastly inferior in many ways. Just look at the price of fuel, and what burning it theoretically is doing to the ecosystem, and it makes jerks like the al-Saud family rich. It’s also among the most dangerous things we can do over which we have an almost pitiful amount of control (think drunk drivers or falling asleep at the wheel).

I’ve always loved the smell of barns and it’s pretty cool that horses can create more horses. They also know the way home so drunk, stoned, or asleep they’ll get you there.

Automobiles are faster, but that’s over-rated in lots of ways.

Anonymous Coward says:

Can they really not see they are doomed if they deny what lies on their current path? My kids (8 and 11) on their own choose not to watch more than 3 shows and only the new episodes. They have so many other interests and even if they are watching something it’s usually a youtube video or equivalent (ie not a production television show) and recently a Netflix original, but rarely a network TV show.

I know my kids will never go back to being told when, what, and how they are to view TV shows, they have better things to do. I myself who grew up watching TV, went through college wanting the TV to just at least be on, gladly cut the cord and I’m down to probably 2-4 shows I will watch during any random TV season. These networks actively made me want to replace a habit which I don’t want to start again, and awesomely enough, my kids won’t have from the start. I laugh because TV networks are doing this to their selves, and no matter what anyone says they’ll refuse to change course until their 10 ft past the cliff Wile E. Coyote style. Hm, I guess some habits do die hard.

drummer315 (profile) says:

HULU losing current episodes

We cut the cord almost 3 years ago. Yes there are shows we would enjoy but miss and others we still enjoy via HULU, Netflix or Amazon.

However, if HULU removes the current season of shows, We will drop it immediately. We can always read another book, play music, go camping and drink with friends to mention just a few things we already do with our leisure time.

TV shows do not define our lifestyle, but sometimes they may enhance it. When a big megacorp is more interested in its ROI than servicing customers, we can help prove we have power too and just tell them to fuck off!. We do not NEED what they are selling.

Anonymous Coward says:

I dropped PPV 10 years ago. I could not justify the expense then for what value was received. 1/2 the monthly programming was reruns. Out of the rest, there were only 1 or 2 shows a month I was interested in. When digital broadcasting came along I had no reason to buy a new tv. I’ve long ago adjusted to not being a couch potato staring at the one eyed monster for hours per night.

Since cable and the rest of the providers saw wisdom in shoving off commercials on my dime, the price then was way too high.

Now I don’t really care what they do. I am no longer a customer nor a potential customer in the future. I have other things I can do to get entertainment and none of them include PPV.

techno says:

I dropped Hulu because it just couldn’t deliver. Not being able to watch a season to catch up to where it’s at? No thanks, I’ll watch the original programming on Netflix and Amazon. Stopped watching Grimm because it just never got around to delivering the show consistently. Can’t watch blind Spot because I found out about it a week too late. Seriously do they just *not* want people to watch their shows? If they start pushing that metering garbage I’ll move to my home server until they get sued or lose their contract. The 80s and 90s are over. So it goes for music, so it goes for television. When I can get free content just about everywhere, you’re competing for my eyeballs, I’m not competing to get the opportunity to watch you.

Anonymous Coward says:

Re: Re:

” dropped Hulu because it just couldn’t deliver. Not being able to watch a season to catch up to where it’s at? No thanks, I’ll watch the original programming on Netflix and Amazon.”

Keeping up with current shows is the only reason to keep Hulu. Their standing content library is pathetic, and yes, the lack of complete seasons is very irritating. No one even remotely serious about Hulu as a service is going to make this problem worse.

If I didn’t know better, I would think someone didn’t want Hulu to be all that useful.

Anonymous Coward says:

Hulu actually provides a service?

The only time I see it mentioned is when website inserts a video from the US-centric service, usually resulting in a “OMG, you’re not permitted to watch this because you’re foreign. Love, Hulu” message for me.

I usually take that as a “screw you, foreigner”. Sometimes, I’ll look for the material elsewhere if I can be arsed; a lot of the time, I cannot. Hit enough of these failed videos, and I figure the site doing the inserting doesn’t care enough to want my eyeballs either.

I’ve got enough other stuff to do anyway; watching that video can’t have been important.

Anonymous Coward says:

From the article: “Several Wall Street analysts believe a significant part of Hulu’s value and appeal to consumers is tied to its current-season deals with its owners.”

So, basically, Wall Street thinks killing current-season means killing Hulu’s profits and killing Hulu’s appeal to customers.

Hulu’s current customers will unquestionably get pissed off, cancel, and quickly move to Netflix, assuming they aren’t already Netflix customers.

Hulu loses a ton of money, Netflix gains a ton of money, and Time-Warner ends up pissing away their $2 billion cash infusion and accomplishing nothing but making Netflix bigger and more profitable.

The business development guys over at Netflix have to be laughing their asses off right now. There is literally nothing that legacy entertainment companies won’t do to kill themselves faster.

Anonymous Coward says:

All they have to do is lower or arrest the cost of cable. So many people would find the usual cable TV set up quite fine if it wasn’t so damned expensive and getting more expensive every time a bill shows up. The constant upward creep of automatically-programmed price hikes is insane. They’re rolling in cash but it’s not enough, they want to squeeze out every last dime until they find that tipping point… they they get confused about why their price hikes caused that tipping point to tip over and the customers to flee.

That Anonymous Coward (profile) says:

Somewhere in a darkened room there is someone who is actively trying to kill Hulu. The PR machine will fire up and tell shareholders that cord cutting doesn’t exist because we totally offered a cord free version, and those idiot cordcutters (who don’t REALLY exist) never used the service. They will not mention that they did everything possible to annoy those consumers by removing content people wanted to see. They will then raise rates to make up for the bad investment in Hulu, working on creating more cord cutters.

The biggest problems they are facing is the idea that no one would forgo seeing their content or find a different path to it.

Consumers want to get the content and are willing to pay reasonable fees. Cutting off all of the options has 2 possible outcomes, they goto a competitor who has content or they will find a way to get the content outside the “rules”. The cartels are so focused on locking down & keeping control over the content they miss that even die hard nonpirates are getting fed up.
The cartel thinks if you watch it on a tablet during your commute, its a public performance and they need to get extra.
They stream lesser quality to avoid someone finding a way to “steal” the stream, making people who want to pay them unhappy when the stream stutters.

For far to long they have been the only game in town and the big firey sky rock hasn’t clued them in that things have changed. They made sure they didn’t have to compete and now their asses are bonded to the laurels they were resting on and they can’t compete. Willing to bet some industry insiders are still saying privately the internet is just a fad that is gonna die off soon.

In the meantime everytime they insanely cut off access they drive one more person to the realization they don’t count. That person will see others who are watching things they can’t, and learn how its done.

That One Guy (profile) says:

Works on monkeys, works on business execs

It’s not an enviable position for the traditional TV industry to be in. To seriously combat cord cutting, it needs to offer a more flexible product at a lower cost — something that (with a few “skinny bundle” exceptions) it absolutely refuses to do.

Something I’ve heard about, though I’ve no idea how accurate it is, involves a way to catch monkeys.

What the ‘hunters’ do is they have jars they put bait in attached to something, with openings just large enough for a monkey to stick their empty hand inside, but too small for them to remove it once they have hold of the bait. Despite the fact that the monkey could easily escape by simply letting go of the bait, they refuse to do so, and as a result are captured when the hunter goes to check the trap.

The execs of Time Warner and similar companies are acting exactly the same way. They could easily escape the ‘trap’ that they’ve found themselves in by letting go of the ‘bait’, in this case the lucrative profits and control they’ve become accustomed to, but instead they remain trapped, locked in place until the hunter named ‘competition’ comes by to kill them.

That Anonymous Coward (profile) says:

Re: Works on monkeys, works on business execs

They are just waiting for the first couple to die before they consider it might be time to let go.

The problem is like the weather, we all bitch about it but often do nothing to make it change. I can mention Sony and we all know the long list of failures… but people keep buying. There isn’t a connected effort to remind the giants that at the end of the day they need to offer us what we want.

Game of Thrones gets hugely pirated, because of stupid deals locking up the hottest commodity in a system that doesn’t work in todays reality. They are proud to be so popular, but are scared of making any changes to the old model to see if a new model might get them money from the “pirates”. They get to whine about how they need more copyright to protect it while ignoring money they could be earning by embracing consumer demand.

Until enough people get pissed off enough to demand better, nothing is going to change. Perhaps maybe we should let go of the bait in the traps holding us.

Ninja (profile) says:

The problem is, if Hulu isn’t willing to offer what consumers want, Netflix, Amazon, or some other company certainly will.

Or not. Who owns the monopoly (copyright) over the content?

What I see is Netflix and the rest of the competition jumping into the bandwagon of original self-productions. This is good. And bad. Because it inevitably creates fragmentation. But then again, file sharing is there for all of our needs.

tqk (profile) says:

Fun with numbers.

16% of consumers cut the cord last year, while 23% of consumers engaged in “cord-trimming” …

Point of order, Mr. Speaker? Ah, statistics. Is that 16% of *all* potential consumers, or only of those signed up for cable? 16% of ca. 300 million potential consumers, or (eg.) 200 million signed up subscribers/customers?

Or, am I totally off-base here?

Not an Electronic Rodent (profile) says:

It's quantum, innit?

I believe what Warner really wants to buy is Schrödinger’s Streaming Service; it offers innovative, easy-to-use, on-demand, flexible access to all the content in the world at a price so perfectly balanced at to make customers flock to it while cheating a healthy profit-margin, while simultaneously providing no real competition to infexible, piece-meal, overpriced pay-TV.

Maybe they’d be better buying a cat….

Anonymous Coward says:

Different perspectives

The cable companies have a completely different idea from their customers about the business they are engaged in.

They think they are selling content. But their customers see content that is mostly free over the airwaves, which is clearly being paid for by advertising.

The customers think they are buying a delivery service. When the customers believe they are buying something that is fundamentally different than what the company thinks it is selling, failure seems certain.

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