Is Hulu 'The Greatest Destruction of Media Value In Our Lifetime'?

from the that's-one-way-to-look-at-it dept

Hulu, the online video site that has content from most of the major networks, has largely been an early success. While it's thrown up some barriers to users, it's done a decent job of putting attractive content in an easily accessible format, and users have flocked to it. Still, we've wondered if the site will be able to survive in the long run because of the demands of its content providers, which seem to be behind its user-unfriendly moves. To get a glimpse of the thinking that drives these actions, check out a piece over on Paidcontent called Memo To Networks Re Hulu: You're Making A Big Mistake, written by a former TV development exec. He says that giving users what they want -- in the form of Hulu -- isn't a good idea because it undermines the TV networks' brands. He uses the example of NBC, saying its value isn't its programming, but rather "the more than 70 years that it has taken the network to create expectations for generation... The years that it has taken the network to train consumers to expect a level of quality that can't be matched."

Wow. We've talked a lot before about how media companies overvalue their content and don't realize the importance of the services that distribute it, but completely ignoring the value of the content in favor of a TV network brand seems only slightly ridiculous. The guy is right in that network brands don't have any meaning any more, but it's not Hulu that did this. It was because the networks failed to keep up with changing viewer preferences and demands, and responded to the rise of the DVR and other new technologies with attempts to set up obstacles, rather than innovation. Viewers' loyalties now lie with individual shows, and the channel upon which they're transmitted is meaningless. The strong brands are the shows, not the networks. People simply set their DVR to catch all the programs, or they go to Hulu, ignoring the network. Even people who watch their TV the old-fashioned way don't have much awareness or interest in the network brands, beyond the evening newscasts (maybe). The former exec's advice for networks is to keep their shows locked up on their own sites so they can "stand by their brand." But where does the brand ever deliver the value that he thinks they have? Sure, the networks can try to prop up their brands by making things more difficult for their audience online -- but they've tried that strategy, and it hasn't worked. So perhaps opening up access to their content, and getting themselves (and their brands) out of the way, is a better way forward.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Anonymous Coward, May 19th, 2009 @ 1:38pm

    There are exceptions to this. While I agree nobody has strong affectations for the major networks, many people do have strong affectations for specific programming blocks or niche networks. Examples include Game Show Network (Small subgroup of people who are obsessive about game shows have loyalty to the network), likewise, similar mechanics with SciFi, and to some extent programming blocks like Adult Swim.

    However, where viewers continue to have strong loyalty most particularly (in my opinion) are 'news' networks. There are still huge groups of viewers who view themselves as loyal or affiliated with Fox News or CNN or one of the other major news outlets. In the case of news networks, the 'value' added by reinforcing viewer biases helps keep viewers locked in to particular 'vendors' or news and opinion.

    That said, the remaining examples of viewer loyalty are all examples of catering to particular groups specifically, and my having related content that fits together, not by having an overarching brand that extends too much beyond that related content.

    And I don't think it shows that Hulu is a bad idea, rather conversely it shows that services that allow users a media diet closer to their 'ideal' preferences will succeed much more than a network which tries to have broad cross-section of content. In other words, if users want a diet of cartoons or a science fiction or biased news, giving them the tools to set up a constant stream of it, self-selected is likely the natural evolution of picking it for them.

     

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  2.  
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    Chronno S. Trigger, May 19th, 2009 @ 1:58pm

    Re:

    I see what you're saying. Use to be, when we see a new show and it's branded SciFi it was a must see thing. If it's from SciFi it must be good. That definitely got diluted, but it wasn't Hulu that did it, it was SyFy. Same with Adult Swim, Tech TV, Spike. Last I saw, Food Network was heading that way and Discovery showed signs that it was starting to.

    That all said, I'm 26 and I don't remember when NBC had a good brand. The previous 44 years don't mean crap to me.

     

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  3.  
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    Evil Mike, May 19th, 2009 @ 2:06pm

    Here's a thought...

    [From the referenced article:]
    "There is one last resort. I was talking to a former top media analyst who has a unique opinion: The reason all three networks have taken a controlling interest in Hulu is because they are going to build it up and then kill it! Brilliant! Eat your young. Who said there wasn’t a place for cannibalization?"

    There will emerge ONE place where you can get full-length awesome quality video streamed to your computer--the Google of video watching (not YouTube though...at least not yet) if you will--and those not with it will be those who are failing.

    This is almost an analogue of when "shows" switched to that newfangled invention called "television." I'm sure there were a few who were absolutely certain that the whole "television" thing was a fad. And where are those people now?

     

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  4.  
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    some old guy, May 19th, 2009 @ 2:09pm

    Simply put..

    The "tv network" is a broadcast only entity. It's not needed anymore in a two way world.

    What's ironic, is that the "internet network" is what killed the need for the "tv network".

    TV Networks were needed because someone had to manage a finite resource: Broadcast Bandwidth.

    They are no longer needed.

     

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  5.  
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    DB, May 19th, 2009 @ 2:12pm

    How much do the networks mean to me?

    The local television stations switched to HDTV a couple of months ago and I did not even realize it. Why? Because I watch all my programming on the internet. The only reason I even noticed was because the tornado siren went off in my area and I wanted to see the live broadcast. Oops. nothing but static. However one of my local stations broadcast over the internet , so I could get my live updates anyway. I am still not sure if I will bother to get an HDTV, but if I do it will not be because I miss any of the three letter networks.

     

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  6.  
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    Daniel B., May 19th, 2009 @ 2:15pm

    A lesson from the consumer branding experts

    Look at how the large consumer product companies, such as Proctor and Gamble, handle brands: They focus all their branding efforts on the product (show in this case) and nothing on the company (network).

    Quite frankly, even with a gun pointed at my head, right now I couldn't tell you which brand of laundry soap was made by P&G. But I do know that we use Tide :)

     

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  7.  
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    anon, May 19th, 2009 @ 2:16pm

    Greatest value of destructionism?

    As far as greatest value of destruction done to media, these network execs should do a closer study of the art forms that they sell. Dadaism was one of the first truly destructive art forms, throwing away all notions of their contemporary art forms. that was in the early 1900's, and now all of our modern and post-modern art forms can follow their roots down through dadaism.
    It's the same with all forms of artistic media, someone not only breaks the mold, but crushes it mercilessly. The ensuing art forms are more accessible to their contemporary audiences. The executives should be seeing this reforming of their media as a boon and an opportunity to not only make the content easier to access but also harness the medium for greater entertainment value and superior content; i wouldn't try to colorize a movie with oil paints, therefore I probably should start looking for better ways of harnessing streaming content for movies.
    maybe that was too much...

     

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  8.  
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    Satchmo, May 19th, 2009 @ 2:27pm

    Re: How much do the networks mean to me?

    I think you meant that your local networks went to digital TV. It isn't the same as HDTV; you only need a converter box and it's about $10 after the rebate.
    Not saying you need it, but just a FYI.

     

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  9.  
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    :Lobo Santo, May 19th, 2009 @ 2:41pm

    Re: How much do the networks mean to me?

    An HDTV is so worth it!

    I stream Hi-Def avi files from the PC to my PS3 and watch them in glorious sound and color!!

     

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  10.  
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    Anonymous Coward, May 19th, 2009 @ 2:43pm

    Re: Simply put..

    Internet killed the television star?

     

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  11.  
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    :Lobo Santo, May 19th, 2009 @ 3:06pm

    Re: Re: Simply put..

    That would be an awesome song... I hope somebody makes it.

     

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  12.  
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    ChronoFish (profile), May 19th, 2009 @ 3:45pm

    Hulu is why I watch ANY Network shows

    Here is something the Network execs should consider: I get FIOS Internet - and I don't get the TV option, nor do I get cable, nor have I bothered to purchase a digital converter box.

    Hulu is the only reason I watch any network TV (along with their ads and embedded product placement) at all. Would I miss it if it dissolved? You bet - the convenience is awesome. But I'm not going to miss it enough to pay for cable or go hunting between "Network" sites.

    Hulu is the Pandora box of Network television. It's what I've been waiting for - for years. If producers can't get great shows like "Arrested Development" on the "air" I suspect they'll be going direct to Hulu and Hulu-like websites. And that will be - "all she wrote...."

    -CF

     

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  13.  
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    Mechwarrior, May 19th, 2009 @ 3:48pm

    So , its not the shows that give value to the networks, but the bluster of the network itself.

    No wonder nobody watches TV anymore.

     

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  14.  
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    Jason, May 19th, 2009 @ 4:11pm

    Re: Re: Re: Simply put..

    You totally stole that from Victor Hugo's Hunchback of Notre Dame when Dom Frollo holds up the book and says "The book will kill the edifice."

    INFRINGEMENT!!!! Please leave all the poor dead authors alone!

     

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  15.  
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    I miss my youth, May 19th, 2009 @ 4:22pm

    Re: Re:

    Saturday Morning Cartoons in the mid to late 80s and early 90s was the last time I considered NBC a good brand.

     

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  16.  
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    for show, May 19th, 2009 @ 4:27pm

    I don't watch TV because I love ABC over DEF. I watch shows on TV because I want to watch the show not the network.

    I watch a channel a lot because they have done a good job at getting attractive shows; History Channel, Discovery, USA, FX, TNT...
    But if they lose the shows I watch them for, I'll drop them like a hot potato.

    Network means nothing
    Shows mean everything

    Hulu has what I watch, WHEN I want to watch it...

     

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  17.  
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    Taurnil, May 19th, 2009 @ 5:08pm

    The blind mice

    Great piece. It demonstrates just how ignorant, full of themselves, and clueless the networks are. It's taken the Internet to demonstrate to these boneheads people watch a program on their network BECAUSE of the content. Yet, even with the billions of quarters in their pockets, they STILL cannot buy a clue. How pathetic. It is no wonder they rally the Gestapo, erm I mean the **AAs to sue their customers. I watch House because it's on Fox? Pfft. I could care less what network it is on. As your article says, it has ALWAYS been about the content and always WILL be about the content. The question is, how many quarters do they need to rub?

     

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  18.  
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    ChurchHatesTucker (profile), May 19th, 2009 @ 5:35pm

    Re: Re:

    That all said, I'm 26 and I don't remember when NBC had a good brand. The previous 44 years don't mean crap to me.

    I've got some years on you, and I don't remember when NBC had a brand at all. It was and is just another network. Sometimes they'd show good shows, sometimes not. Nobody said, "Hey, a new show. What network is it on? NBC? I must see that!"

    Fox is the only broadcast network that has any kind of 'brand' and that's largely "New show on Fox? And it's good? How long before they kill it?"

     

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  19.  
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    Haggie, May 19th, 2009 @ 5:38pm

    I think the biggest risk is to the premium cable channels. Their perceived cost is dramatically higher to customers than the cost of networks (time watching commercials) or basic cable (relatively low and more tightly regulated).

    As consumers find more and more content online (hulu, movies on demand, made-for-Internet content), the perceived value of the incremental content provided by premium cable channels will steadily decrease.

    Simply put, why pay an additional $50 for a premium cable package if the high speed Internet connection that also costs $50 delivers enough quality content to fill all my available free time?

     

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  20.  
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    Phoenix, May 19th, 2009 @ 5:57pm

    NBC Brand

    Oh yes, I am definitely aware of the NBC brand. Let me tell you what is burned into my brain about the NBC brand:

    1. The worst Olympics coverage imaginable. The anchor was one of the most non-athletic people on the planet (Costas), 50% of the coverage was f*ing beach volleyball, and the remaining 50% was non-real time and weak (except for Phelps of course, that incredible dope-smoking swimming machine). Thank goodness for proxy servers and Internet-streamed content from the CBC in Canada.

    2. The most aggressive war against 'the new distributors'. NBC has been fighting Apple and Amazon with an 'NBC knows best' online business model. Guess what? Every NBC victory has resulted in lower NBC revenue from iTunes and Amazon. Idiots. They're defending a model that is already dead, they just haven't accepted it yet. I think we should refer to these luddites as 'digital necrophiliacs'.

    There is nothing positive about NBC to balance these strong negative impressions because I don't watch TV shows from network broadcasts, I either buy the DVD packages or buy them off iTunes or Amazon. I have no clue which network is responsible for my favorite shows. Oh, and even if I did like NBC news, that wouldn't cause me to like their content. WTF? Does NBC think that I'm going to watch a show 'because their news is good'? Even worse, do they think that if I watch NBC news, I'm more likely to leave it on that channel and catch the next show? If NBC thinks that, they're even stupider than I thought. I don't watch live TV. The commercials are too disruptive. Same reason I abandoned newspapers - the ads got out of control.

    Sigh.

     

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  21.  
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    Anonymous Coward, May 19th, 2009 @ 6:02pm

    hulu kills the concept of event, what you will talk about around the water cooler tomorrow or mumble about on twitter. watch any time so prime time is no time.

     

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  22.  
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    Jeroen, May 19th, 2009 @ 8:39pm

    Internet killed the video star

    ... just a link that fits this subject perfect... http://www.youtube.com/watch?v=BiB0VgOKojg

     

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  23.  
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    Genie, May 19th, 2009 @ 9:17pm

    Re: Re: Re: Simply put..Internet killed the video star

    eStudios has you covered!

    This oldie but goodie flash parody by the "broad band" fulfills that request nicely with a crescendo of laughs based on internet history...

    http://www.flash.li.ru/wrestle/1703/clips1703/videostar.swf

    What was great about these guys is how well they manged to make their parodies sound like the real thing...

     

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  24.  
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    Gleeful Anticipation, May 19th, 2009 @ 9:29pm

    Kill your failing business models faster!

    I hope these idiot corporations listen to everything they hear in the echo chamber that is Big Media today and continue doing everything they're already doing. I want to see more of them yanking their shows around from time slot to time slot, more "reality" television, more remakes of older shows, more "re-imaginings" that destroy the very things that made a show interesting, more suing of their customers, more canceling a show before it can find an audience, more more more!

    The sooner they die off the sooner we can get on without them and their nonsense.

    This could be the best time to be in the media business if they'd just get their acts together and recognize the changing world around them. They could be raking in money hand over fist by positioning shows on both their networks and on the internet. They could be taking advantage of the smaller cult audiences that develop around shows by offering them in the smaller (yet larger) venue of the internet. They could be doing so much differently and making so much more money because of it. Instead they are choking the entire culture with their rotten and festering carcasses and I sincerely hope they continue to do so until they kill their entire industry.

    I have no fear of boredom, if nothing else we'll always have the works of devoted fans of such universes as Star Trek and Star Wars, and LOTR to produce stuff for us. In time they will take the knowledge they've learned and produce original works unhampered by the efforts of the zombies of corporate media... So I hope they keep stabbing themselves in the heart as hard as they can, because the sooner they die the sooner we can have the funeral and get on with things!

     

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  25.  
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    Osno, May 20th, 2009 @ 4:18am

    Hulu = Napster?

    I specially like the last sentence: "The music industry has never recovered from Napster. Eat Hulu before it eats you!". Napster had nothing to do with Hulu!! Napster was a good service that let you download files without consent from the content providers. Hulu is absolutely under control and probably serving some business model. The music industry never actually used Napster. Maybe if they did, there won't be a problem now.

     

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  26.  
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    Bob, May 20th, 2009 @ 4:31am

    Free the TV

    You don't really think the networks are going to "give away" their cable only channel shows on Hulu forever, do you?

    Remember the days before cable? The days when advertising alone paid for TV, so it was essentially free? They have had us all paying to watch commercials for the past 25 years, in addition to getting paid by the advertisers. They are not about to give up that double ended cash cow without a fight.

    This is just a prelude to the day when, after they get you hooked on Internet TV, they suddenly make it a subscriber driven site. Or as an alternative to that, make a deal with the Cable FIOS and Satellite companies to start charging us by the MB or GB for Internet. "Afterall", they will say, "high quality TV video uses a LOT of bandwidth. We have to manage those costs or we'll bog down the whole system."

    The ironic thing is, that at the same time the Networks are headed in that direction, we have just made a dramatic change in the way TV signals are broadcast. When the switch to digital is complete next month, more than half of those currently getting their TV through cable or FIOS will no longer need those rebroadcasting services to get a crystal clear picture. A roof top antenna, or even just rabbit ears, will be all that's required for many.

    It may seem a bit ludditish (is that a word?) to suggest going back to that old method of receiving TV, but when more people realize that with digital, they can get a perfect picture over the air for free, with none of the snow, ghosting, and interference that antenna TV used to be plagued by, they will start to seriously analyze their viewing habits, and if they conclude there is nothing they consider "must see" on the cable only channels, they'll decide there are much better things they could be doing with the $50-$100/month they are paying now for TV.

    And when that starts happening in large enough numbers, the Networks will panic. They will no longer be able to demand the same advertising dollars for the cable only channels as viewers start cancelling cable and FIOS. They might even lower their charge to the rebroadcasters hoping to lure people back.

    If that doesn't work, they will have to follow the money to where it's at - over the air. That's when you will start to see some of the cable only channels begin appearing on the 5 additional digital sub channels that are now available to each local network affiliate. Better to have at least half the cash cow, than none at all.

    NATIONAL CANCEL CABLE (FIOS and Satellite) DAY IS JUNE 30 2010.

     

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  27.  
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    Travis, May 20th, 2009 @ 9:40am

    Re: The blind mice

    House is on Fox, hmm didn't know that. And I watch it every week. Just goes to show you how wrong this guy is.

     

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  28.  
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    mobiGeek, May 20th, 2009 @ 11:25am

    Re:

    IMO, the "network identity" was lost with the proliferation of the remote control.

    Prior to that people had to put in the extreme effort of picking themselves off the couch and manually turning a knob, possibly retuning the antenna (or yelling at the kids/wife to do the same).

    With the remote control, people had the power to choose their own "programming", flipping to something else on a whim.

    That is when the networks needed to step up, to build their brand and to work on actually retaining viewership. A bit late to talk about how the interwebs are stealing their markets now.

     

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  29.  
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    SAB, May 20th, 2009 @ 1:00pm

    The brand sticks to the content creator, not the network

    PaidContent vastly overestimates the brand equity of the TV networks.

    I don't know of anyone who has ever given a damn about what network a show is on. The brand, these days, is the show, its cast, and its creator. Joss Whedon is a brand with a devoted following. Law and Order and CSI are brands. CSI, American Idol, and Dancing with the Stars are all brands, as are Oprah, Rachel Ray and Ellen.

    There's little evidence that networks, themselves, believe the argument about their brand value, either. They well know that viewers will follow a show from one network to another. Monday Night Football was on ABC for 35 years. And then it wasn't. Viewers followed it to ESPN. Their loyalty was not to ABC, but to watching football on Monday night. Similarly, when Fox outbid CBS in 1993 for the rights to broadcast NFC football games, the audience followed the NFC to Fox. they didn't stick around to see what else CBS might show them.

     

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  30.  
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    QuantumIguana, May 20th, 2009 @ 2:20pm

    Nothing good ever came out of the Internet?

    That's the same movie studious were saying about the VCR, claiming it was going to be the death of the studios. Instead it was their salvation. It let them make money after the movie left the threatres.

    It's also the same thing that was said about the printing press.

     

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  31.  
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    js, May 21st, 2009 @ 7:05am

    and who will pay for all the content you watch on Hulu

    I agree, Hulu is a great service. But who do you think is going to pay to create new programs? Without the network model and ability to create pilots and get them on air, Hulu is nothing more than youtube...random UGC and some old archived programming.

     

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  32.  
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    ChronoFish (profile), May 29th, 2009 @ 11:40am

    Re: and who will pay for all the content you watch on Hulu

    "...Hulu is nothing more than youtube...random UGC and some old archived programming..."

    Well it's a bit more than Youtube. For one it's not just "any uploaded content". Two, it's not "old archived programming" - while it has that, it is also (often) "just days old" temporarily available (e.g. Chuck, Bones, House, Colbert Report) content.

    And finally - they have a revenue model - all the shows contain embedded advertisement.

     

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