Soon, you'll have to pay for Hulu
Filed under: Company News, Media
Don't get too attached to all that free, high-quality video on Hulu. It just might disappear behind a pay wall before too long.Speaking last night at an Internet Week event sponsored by The Hollywood Reporter, Jonathan Miller, News Corp.'s newly-installed chief digital officer, said he envisions a future where at least some of the TV shows and movies on Hulu, the premium video site co-owned by News Corp. (NWS), NBC Universal and Disney (DIS), are available only to subscribers.
Miller, whose last job was running AOL (parent of Daily Finance), prefaced his remark by noting that he won't attend his first Hulu board meeting until Monday, so the scenario he foresees is merely his own speculation. But, he continued, "in my opinion the answer could be yes. I don't see why over time that shouldn't happen. I don't think it's on the agenda for Monday [but] it seems to me that over time that could be a logical thing."
And considering that Miller is in charge of coordinating News Corp.'s efforts to find new ways to get consumers to pay for digital content generated by News Corp.'s properties -- which include Fox Television, Fox News, 20th Century Fox films, The Wall Street Journal and much more -- his definition of what's logical is likely to carry a lot of weight.
Miller also talked about what he thinks newspapers will have to do to convince readers to pay for articles that they're used to getting free on the web.
I think what works for consumers most likely -- and this has to be tested, frankly -- is bundles. I think you have to figure out what are the right bundles that people buy and what's contained in that bundle. For example, you could have -- and I'm making this up entirely -- you could have a New York bundle, and that could consist of various papers or publications that are relevant to the audience in New York, and you could make that all, potentially, a bundle to a consumer at one price.Such a bundle, he added, might include not just content but also a device to read it on, such as a Kindle or an iPhone.
Miller illustrated the problems papers -- even those rare ones that, like The Wall Street Journal, have had some success getting consumers to pay up -- now face with a story from his own experience. After buying his first Kindle three months ago, he said, he canceled his $14-a-month subscription to The Wall Street Journal Online in favor of a cheaper subscription through Kindle.
I went from paying $14 to The Wall Street Journal to paying $10 to Amazon. Now the splits there, and I think this is relatively well known, are very, very much in favor of Amazon. So I became very much less valuable to The Wall Street Journal. That's part one. Part two is they don't know I exist. I went from being someone who's their subscriber to being someone who is an Amazon subscriber, which The Wall Street Journal has no visibility back to and cannot manage that customer relationship. . . . So they've lost both the customer management and, trust me, the lion's share of the economics.
Fed stalls on Chinese bank deal, costs taxpayers $1.7 billion
Dell in a handbasket: Should founder Michael Dell resign?
TARP saved the banking system, but failed at everything else
Reader Comments (Page 1 of 5)
6-03-2009 @ 12:23PM
Pcambron said...
The fact that executives are still trying to figure out a way to charge for content online is mind boggling to me. It doesn't work. Hulu was an ingenious idea. Since people were watching shows online for free anyways, why not create create an online platform and shift power back to the networks.
If it starts charging, Hulu will lose its audience to video sharing sites like sidereel.com, and dailymotion. There are thousands of similar sites, and they pop up quicker than they can be shut down. Miller should take a look at the media industry around him, and take some notes. I suggest starting with the music industry.
Reply
6-03-2009 @ 1:48PM
pcambron said...
Looks like the majority agrees with me: http://www.engadgethd.com/2009/06/03/poll-how-much-would-you-pay-for-hulu-on-your-tv/,
Over 70% would be unwilling to pay a dime.
6-03-2009 @ 5:57PM
MICKEY said...
No more money from me for anything. You get money from advertizing, be happy with that. I will not pay anything, I have not become addicted to it and I will not miss it when you try to collect money for it. Why don't I just say goodbye now. You screwed up AOL, now you want to screw up Hulu. Hasta la vista baby!!
6-04-2009 @ 1:08PM
doctor paradox said...
@MICKEY -- aol doesn't own and operate hulu, news corp. and nbc universal do. (jon miller was formerly at aol, now is at news corp)
6-06-2009 @ 10:21AM
ehT said...
@ Paradox -- His point exactly. He use to work for AOL.. which failed... and now works for the hugely sucessful Hulu. He's saying that taking his advice is akin to shooting yourself in the foot... twice. Fire this man for making you stock go down just by mentioning this bull. He hasn't even TALKED TO ANYBODY ABOUT HIS "IDEAS" YET (caps intended).
6-03-2009 @ 12:57PM
kdoklahoma said...
Hulu was a great idea, until he started talking about charging for it. No thanks, I'll go elsewhere!
Reply
6-03-2009 @ 1:18PM
Brian said...
Broadcast TV shows are paid for by the sale of the commercial ads shown during them. Hulu already embeds commercials in their videos. Get the advertisers to pay enough for those embedded ads (ads where they can actually track the number of click-throughs, and are therefore arguably more valuable for measuring an ad's effectiveness), and the content is paid for. Subscription fees shouldn't be necessary to subsidize the service.
Reply
6-03-2009 @ 1:27PM
MysterZero said...
Another good site that will slowly die due to people not wanting to pay for a subscription.
Reply
6-03-2009 @ 4:56PM
phoeni{X} said...
Why should we pay for a subscription when they are already making money off the current ad based system? They just want our blood money to make their profit margins sky rocket.
6-03-2009 @ 1:27PM
Jack said...
A reasonable compromise plan could be to make a subscription necessary for HD content. Lower-res content appropriate for a laptop or smaller desktop screen is free (with advertisements), while higher res video, perhaps up to HDTV quality as broadband speeds increase, comes at a price. If they did that though, I can see some shows being "exclusively in HD."
Reply
6-03-2009 @ 1:41PM
Mike said...
Leave it up to someone that was running AOL to think this is a good idea. The only way I would subscribe to Hulu would be if they removed all commercials completely. Hulu just needs to manage their current commercials better.
6-03-2009 @ 1:39PM
AnonymousFinger said...
I would gladly watch "unskippable" commercials for free viewing of HD video of TV shows on Hulu. I would love to tell my cable TV provider to take a hike.
(I have a nice HTPC attached to my 52" LCD)
Reply
6-03-2009 @ 1:53PM
Adam Dunny said...
LOL< I am surprised the free stuff lasted this long!
RT
www.real-anonymity.pro.tc
Reply
6-03-2009 @ 1:42PM
David said...
I guess Jonathan Miller has never heard of a little thing called Napster? Charging the end-user is not the answer. Find some way to monetize using advertising.
Reply
6-03-2009 @ 1:45PM
Gadfly22 said...
I have cable and a DVR. I have a PS3 and Wii. I have the internet, and I have books. Plus DVDs and a Netflix subscription, and going out to an occasional movie in the theater.
How much does Hulu think I'm willing to commit -- timewise and money-wise-- on a subscription basis to content that will (presumably) still be littered with commercials? Unless there's compelling content offered, I'd have to say about $0-$1 per month (i.e., a negligible amount) would be about right.
Bear in mind, all the Hulu-offered content has already made money through other media. Hulu-generated money is just the icing on the cake.
Reply
6-03-2009 @ 8:17PM
Mike2 said...
Since when does the guy who ran AOL carry any weight in how to manage the internet? The site contains advertisements, which subsidize the content, and everyone is happy. This always happens where mere profitablity isn't enough and these kinds of executives who are completely out of touch come in and try to turn a profitable enterprise into some kind of unlimited cash cow or the next microsoft and end up ruining the entire endeavor. Keep the successful business model already in place and gain profits as more and more users flock to hulu as people become used to watching shows online. Try to attract more customers rather than thinking of a way to fleece money from your existing customers.
Reply
6-03-2009 @ 8:17PM
scott said...
wow, another great website ruined by someone that just wants to make a buck. what's wrong with exploring more advertising?? the ads they use now are great in their brevity. Hulu just needs to get out there and SELL MORE ADS they don't need to be any longer or with more frequency (none of us want that) they just need to start making companies realize how many people are watching their programming! since the ads are shorter and less frequent, more people sit through them... no one pays me millions, but isn't there a bit of an opportunity here?
Reply
6-03-2009 @ 8:19PM
Ed Sawma said...
First reaction was I was upset, but then very quickly agreed. There's no way it will stay 100% free for too long. As they introduce new content to the site, they can easily start charging. They can also start putting more archives on there, and charge for that. Lots of creative ways for them to charge. Maybe they'll still have some amount of free content. Probably a mix.
People who say that it will turn people back to the free (illegal) video sharing only need to go back a few years to Kazaa vs. iTunes. We know who won that one.
"pay subscription + convenient + high quality" definitely beats out "free + difficult + illegal"
Reply
6-04-2009 @ 10:23AM
ben said...
Difficult Sawma? Really. Comon, I could find everything I needed for tv shows very easily. In fact there are torrent sites that do nothing but tv shows.
6-03-2009 @ 2:10PM
silentblue7777 said...
so you've run AOL into the ground? now you want to do the same thing to Hulu? Obviously the old business plans arent working with this new media. Go back to the drawing board and figure out how to work with the media, not put a fence around it.
Reply