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?


Reader Comments (rss)

(Flattened / Threaded)

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    ChurchHatesTucker (profile), Jun 15th, 2009 @ 12:25pm

    Oy vey

    Y'know, one would think that people who couldn't give sound advice at the dawn of *radio* would be laughed out of the business.

    One would be wrong, sadly.

     

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    jake, Jun 15th, 2009 @ 12:39pm

    bastiat

    are tv shows really that indispensable? why do these people think, that without tv shows and television the money in this industry will simply disappear? men have tremendous demand for entertainement and we will get it, one way or the another.

     

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    Stute, Jun 15th, 2009 @ 12:39pm

    Okay this just flat out made my head hurt...

     

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    Anonymous Coward, Jun 15th, 2009 @ 12:42pm

    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?

     

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    TriZz (profile), Jun 15th, 2009 @ 12:43pm

    Anti-American?

    I call BS!!

    Americans are the only ones that can access Hulu (without jumping through hoops).

    Hulu-hoops? HEYYO!!

     

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      Anonymous Coward, Jun 15th, 2009 @ 1:21pm

      Re: Anti-American?

      Further proof that Americans are Anti-American.

       

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      Designerfx (profile), Jun 15th, 2009 @ 2:05pm

      Re: Anti-American?

      hahaha.

      Honestly, it's a freeper. They don't even deserve article coverage. The rest of the article was all "is that what you voted for/your tax dollars at work/see what obama does" etc.

       

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    RD, Jun 15th, 2009 @ 12:46pm

    Well, then

    Better shut down the american OTA TV system then. After all, its free and if you arent charging for it, then you are enabling criminals or something.

    F*cktards that exist in this world, I tell you...

     

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      Natanael L (profile), Jul 22nd, 2009 @ 4:16am

      Re: Well, then

      Indeed. Because it's criminal to not pay.

      The idea is basicly that if some blood-sucker can trick one person to pay for something, then it should be illegal for averybody else to not pay for it in order to protect the business for the blood-sucker who profits on it.

       

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    Ima Fish (profile), Jun 15th, 2009 @ 12:51pm

    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.

     

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      Jason, Jun 15th, 2009 @ 4:20pm

      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?

       

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      Natanael L (profile), Jul 22nd, 2009 @ 4:19am

      Re:

      No, you are mistaken - EVERYBODY shall pay for whatever they want you to pay for!

      And the $300 billion - they are probably talking about their own profits that will decrease with $300 billion.

       

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    Anonymous Coward, Jun 15th, 2009 @ 12:53pm

    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.

     

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    AnonCow, Jun 15th, 2009 @ 12:54pm

    Hulu will be charging customers AND selling commercials as soon as they can.

    Anyone really want to bet against me?

     

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    Rob R. (profile), Jun 15th, 2009 @ 12:58pm

    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.

     

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    Researcher, Jun 15th, 2009 @ 1:20pm

    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...

     

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      Ima Fish (profile), Jun 15th, 2009 @ 1:42pm

      Re: Unsubstantiated?

      "IF she wrote the crap claimed, where is it?"

      Good point. There is no original link to back up the alleged quotes.

       

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      DanC (profile), Jun 15th, 2009 @ 2:11pm

      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."

       

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        Jason, Jun 15th, 2009 @ 4:39pm

        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.

         

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          Natanael L (profile), Jul 22nd, 2009 @ 4:29am

          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.

           

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        Anonymous Coward, Jul 22nd, 2009 @ 3:46am

        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)

         

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    Bob, Jun 15th, 2009 @ 1:20pm

    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.

     

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    Danny, Jun 15th, 2009 @ 1:50pm

    Big Bang Theory

    I had absolutely no interest in the TV show "The Big Bang Theory" until I watched a couple of episodes FOR FREE on an American Airlines flight across the Atlantic.

    Now I watch it on network TV and, occasionally, on Hulu.

    Just one more data point into the soup.

     

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      Anonymous Coward, Jun 15th, 2009 @ 2:00pm

      Re: Big Bang Theory

      One of the funniest shows out there, imo. Everyone who has a little geek in them should watch it.

       

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    Sailingmaster (profile), Jun 15th, 2009 @ 1:50pm

    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.

     

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    clearSam, Jun 15th, 2009 @ 2:14pm

    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.

     

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      tdr, Jun 15th, 2009 @ 5:41pm

      Re: whatever...

      Too late, they already are. And they're not much better than this:

      Dark Helmet: How many a.h. we got on this ship anyhow?
      Everyone: Yo!
      Dark Helmet: I knew it, I'm surrounded by a.h.!
      Dark Helmet: Keep firing, a.h.!

       

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    Anonymous Coward, Jun 15th, 2009 @ 2:26pm

    This Laura Martin character obviously has no clue what she is talking about. Thanks for the afternoon laugh Tech Dirt.

     

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    Oldster, Jun 15th, 2009 @ 2:36pm

    Disney, NBC Universal, News Corporation and Providence Equity Partners own Hulu. The major broadcast networks contribute content on their platform. But I guess Laura Martin knows more than they do...

     

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    Clueby4, Jun 15th, 2009 @ 3:26pm

    Hulu is not free it has Ads

    Sorry, but anything that has Ads is not free.

     

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      Anonymous Coward, Jun 15th, 2009 @ 9:44pm

      Re: Hulu is not free it has Ads

      That's absurd. Everyone knows that the Industry's next step is to start charging for Ads that they allow you to see. Sheesh, you're such an Ad pirate...

       

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    Glenn, Jun 15th, 2009 @ 4:48pm

    Who?

    Isn't this just "free" advertising for Laura Martin? (made ya look!)

     

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    Druid Man, Jun 15th, 2009 @ 4:56pm

    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.

     

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    Ken, Jun 15th, 2009 @ 6:04pm

    re: to this post

    Ehm, free content. watching the program with commercials...wasn't there something like that somewhere before? oh yeah! TV!

    wonder why people go in search for content they wanna watch? eh easy guess.. there is crap on TV. These tv channels made the situation and thus complaining about low viewership, boo hoo.

     

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    Anonymous Coward, Jun 15th, 2009 @ 6:56pm

    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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    Ricebowl (profile), Jun 15th, 2009 @ 11:46pm

    It's just buggy programming...

    The 'consume for zero' error isn't her fault; it's just a faulty implementation.

     

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