News Corps.' Jon Miller Continues His War Against Free; Wants Hulu To Charge

from the that-will-go-over-poorly dept

Thu, Jun 4th 2009 6:10am — Mike Masnick

Just last week we were talking about how News Corps' "chief digital officer" was claiming that free doesn't work, though his reasoning was incredibly weak. It was also incredibly ironic, because Miller's previous work included convincing Time Warner to turn AOL's walled garden into an open and free platform... which was the right move, but got him fired. Perhaps because of that, he now has an aversion to free and is trying to put up garden walls wherever he can, not realizing that the animals won't go back into a walled garden very easily. His latest suggestion, as sent in by robert, is that Hulu should start making shows available by paid subscription only. In other words, take all the good that Hulu did to get people to watch TV online with ads, rather than downloading unauthorized versions... and put it behind a paywall, to drive people right back to unauthorized downloads where there is no ad revenue.

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Filed Under: advertising, business models, economics, free, jon miller
Companies: hulu, news corp.

34 Comments

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Matt, 4 Jun 2009 @ 6:36am

I think that every time people suggest that "Free doesn't work" we should be able to hit them with a tack hammer.
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Kazi, 4 Jun 2009 @ 6:52am

Next they won't take out the advertisements if you pay a subscription for the service. They are just looking to double dip ...
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jeff (profile), 4 Jun 2009 @ 6:59am

I don't have a problem paying to watch shows
But I do have a problem paying Hulu. I'd love to pay to watch shows from HBO like Entourage and Big Love. I wish HBO would make them available online.

Hulu is trying to be the Cox, Verizon, Comcast, or Time-Warner of the web. Hulu will probably want you to sign up with them just like you do with cable tv now. No alacarte. Probably a tiered system.

My problem with Hulu is the fact that it is owned by a media giant. I would rather have a good open source client that hooked into networks like HBO. We don't need the middleman. Lets get the show straight from the source.
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Jebrew (profile), 4 Jun 2009 @ 7:08am

Re:
I believe they have that model. It's called cable.
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Jebrew (profile), 4 Jun 2009 @ 7:11am

Re: I don't have a problem paying to watch shows
For the time being; however, Hulu is doing far more good than harm by having a model that basically mirrors OTA broadcast. If they decide to narrowband it and make people pay, they'll flock back to the torrent sites in no time.

I watch a lot of my shows on Netflix, and I don't mind paying because I don't have to watch commercials, and I can pause/rewind/fast forward as I see fit.
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Roadsider, 4 Jun 2009 @ 7:12am

Miller and AOL
"Miller's previous work included convincing Time Warner to turn AOL's walled garden into an open and free platform... which was the right move..."

Oh really? You'd have a hard time convincing Time Warner shareholders of that now. The acquisition was a disaster for Time, because they just didn't think this one through. There was definitely an opportunity for Time there, but they squandered it. Making it free eliminated an income stream, turning AOL into an albatross. Instead of putting TW content exclusively on AOL and raising its value making subscriptions a viable option, they turned it into yet another internet portal. Big whoop.
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David Lee, 4 Jun 2009 @ 7:30am

Broadcast TV
I can already watch most of the shows carried by HULU for free without a computer -- it's called BROADCAST TV! What's the difference between rabbit ears and a router when watching ad supported content? Same goes for the news and any other content these guys think needs locking up. We've had "free" content broadcast "free" to our living rooms since TV was introduced! You want to pay? Get HBO.
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Anonymous Coward, 4 Jun 2009 @ 7:31am

You know what's ironic about all this is that for many years, the networks didn't want to let us pay them for their shows. Hardcore fans of various TV shows would beg the networks to release certain shows on VHS and the networks said no. Or they would release "select episodes" of a show. We wanted good quality (well, as good as VHS could be) versions of our favorite shows instead of nth generation copies taped off TV.

Even with DVD's smaller footprint they were still hesitant about doing full series releases. I remember when they were getting ready to release the Simpsons and they actually had a poll asking the fans whether they would prefer season boxes, "best of" boxes, or boxes based on characters or premises. And that was well into the DVD era.

And now they're saying the opposite. People who don't want to own a show, but still want to see it are being told "you have to pay." And what's really stupid is that distributing the shows over the internet gives their advertisers a huge amount of data.
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Chronno S. Trigger (profile), 4 Jun 2009 @ 7:45am

Re: Miller and AOL
I would say that it's a good idea, but AOL is a bad product. Crap in, crap out as it were. AOL was starting to die when broadband became popular. Going free is the only thing that's kept it alive this long.
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Easily Amused, 4 Jun 2009 @ 7:46am

Re: Miller and AOL
If they had not gone free they would not exist now. Their exclusive walled off content was never worth paying for, and they relied on people who were new to the internet and didn't know any better, or were just too lazy to leave to keep the money flowing. AOL service had become synonymous with morons and newbies for years.

Paywall restrictions just don't work unless your content is really something unique and special, and even then it's a ticking clock. Eventually someone will do the same or better for free to get your ad revenue.

The obvious exception to this is porn, but even in that arena unless you are offering some kind of unique twist or fetish it will be tough to get enough subscribers.
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Anonymous Coward, 4 Jun 2009 @ 7:52am

Apostrophe abuse
It's News Corp, not News Corps. Thus, possessive would be "News Corp's."
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Another AC, 4 Jun 2009 @ 7:57am

Idiots as usual
Go ahead, charge for it and they will lose me as a loyal ad watching customer.

Just like I refuse to pay comcast (on demand) $1.49 to watch 22 minutes of a TV show in standard definition with 4 15 second commercials.
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James, 4 Jun 2009 @ 8:05am

Does he not know...
...that Hulu is ad-supported? Moran.
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bob, 4 Jun 2009 @ 8:22am

When Hulu Charges
I go back to torrents and rapidshare.
And ripping DVD's from Netflix
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knifight, 4 Jun 2009 @ 8:27am

my 2 cents:

1. I agree with the prediction that Hulu will not remove the ads if they put up a paywall/subscription wall, and so that would in fact be charging both the content provider/sponsor and the content viewer for a single transaction. I doubt this is necessary to generate enough revenue to be a going concern because

2. I imagine the unique internet visitor data that advertisers receive from Hulu's online OTA model has to be ridiculously valuable interms of CwC/S/F (Customers/Supporters/Fans) especially for the smaller non-profits and such that I've seen advertising on Hulu. Those organizations don't have huge budgets to build their community-of-support databases and Hulu advertising seems like an economical way to help build that asset.That value should drive the pricing of Hulu ads which should be enough to pay for the content. I can't imagine that is not as least as valuable to the advertising organization as ads on cable or radio.

3. And personally I think the pay-for-content models of iTunes and Netflicks are a better value than a subsciption fee. I have observed in my own purchasing decisions recently that while I am essentially incapapable of convincing myself of the value of subscribing to content online, I have found that free (to me the consumer) advertiser sponsored viewing of programming does actually lead to more (not less) iTunes/AppleTV purchases & rentals by me. I only pay for content I actually want to see and/or keep instead of subsidizing a bunch of suff I have no interest in.
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Anonymous Coward, 4 Jun 2009 @ 8:32am

Re: Broadcast TV
What's the difference? Cost, amongst other things.

Cost per user to send you that TV show is way higher than it is to have you watch it on broadcast. Worse, for every user you add watching in Hulu, the cost increases. You can add an endless number of users watching on broadcast, and each additional user actually drops the delivery cost per user.

Just because the internet CAN do something doesn't mean it's the best way to do it. Sort of like a dancing elephant at times.
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minijedimaster (profile), 4 Jun 2009 @ 8:41am

Why would he want to ruin a good thing? I mean, isn't it all about the numbers of people? You'd think they would just want quantity when it comes to turning brains into soup.
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Kazi, 4 Jun 2009 @ 9:06am

Re: Re: Broadcast TV
The internet doesn't really do per cost but is more like broadcast. There are plenty of solutions provided by technologies such as RSVP and companies such as Akamai that effectively allow an unlimited number of users to watch 1 stream - much like in a broadcast.

The main difference though is that Hulu is user-demand driven and Broadcast is content provider driven ... then again Hulu can reach a wider audience while Broadcast is limited to certain time periods - unless recorded by end users using additionally costly hardware.
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Kazi, 4 Jun 2009 @ 9:08am

Re: Re: Re: Broadcast TV
Bleh - I mean "cost per user to send" in response to 16.
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btrussell, 4 Jun 2009 @ 9:19am

Re: Apostrophe abuse
's is plural
s' is possessive
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Anonymous Coward, 4 Jun 2009 @ 9:27am

I dropped Hulu at the boxee issue....

They can't get me to watch for free, so yeah, they will charge the BOTS of the human race that have no integrity.

Doh
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The Baker, 4 Jun 2009 @ 9:30am

Re: Apostrophe abuse
I thought it was News Corpse.
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James, 4 Jun 2009 @ 10:05am

Re:
No, It should be a sledge Hammer.
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Anonymous Coward, 4 Jun 2009 @ 10:23am

Just like corporations to take something good and try and break it. If Hulu charges, it forces people to pirate or not watch. Either way the big corporations lose money. We aren't against them making money, we are against them telling us how we should spend our money. Guess what if you can't make your business model work change it or die out.
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Adam, 4 Jun 2009 @ 10:31am

Really, I would not pay a damn thing for HuLu, and already hate the adds, because they're all the same. CNN has it right, where you can skip the add by re-clicking the video, but that is a little bit different. Anything that goes free should have this type of system, cause if i can't stand the site or its adds, I'll leave, go find an illegal copy somewhere, or copy/rip it myself, its that simple. TV stream ing kinda sux imo, and most good ones come in dvd form. I really only watch HuLu for that hillarious muthalova Andy Samberg and SNL crew!! That is literally all I watch on it, like homie above, I'll rip the dvd when its out, way better quality too...lol. stupid squirrels!!
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Anonymous Coward, 4 Jun 2009 @ 11:33am

Re: Re: Broadcast TV
Although I agree that each additional broadcast user drops the cost per user, I'm not sure that's relevant for hulu.

Either they profit from the ads or they don't. If they profit each additional user is additional revenue.

And the internet apparently is a better way to distribute video, otherwise so many people wouldn't be interested in it. Internet video allows the user more control. Broadcast doesn't deliver that at all. Pausing or watching a show when you want to is impossible without additional hardware. Ironically, that additional hardware removes the commercials.

Hulu is the only way broadcast corporations can rightly obtain ad revenue from someone like me. Maybe I'm such a small minority that no one cares. But if that were true, why is every other article on this site about piracy?
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Rekrul, 4 Jun 2009 @ 11:40am

In other words, take all the good that Hulu did to get people to watch TV online with ads, rather than downloading unauthorized versions... and put it behind a paywall, to drive people right back to unauthorized downloads where there is no ad revenue.

Works for me. :)
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Anonymous Coward, 4 Jun 2009 @ 12:54pm

Re: Apostrophe abuse
It's News Corp, not News Corps. Thus, possessive would be "News Corp's."

"News Corpse" has a certain lovable ring to it.
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Anonymous Coward, 4 Jun 2009 @ 12:57pm

Re:
1. I agree with the prediction that Hulu will not remove the ads if they put up a paywall/subscription wall, and so that would in fact be charging both the content provider/sponsor and the content viewer for a single transaction...

Great Prediction. History is often the best predictor, and this is pretty much what happened when Cable TV came out too- The promise of no ads, 15 channels all for $10.00 a month.

That didn't last long.
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Mike Masnick (profile), 4 Jun 2009 @ 1:43pm

Re: Miller and AOL
Oh really? You'd have a hard time convincing Time Warner shareholders of that now. The acquisition was a disaster for Time, because they just didn't think this one through. There was definitely an opportunity for Time there, but they squandered it. Making it free eliminated an income stream, turning AOL into an albatross. Instead of putting TW content exclusively on AOL and raising its value making subscriptions a viable option, they turned it into yet another internet portal. Big whoop.

Heh. You got the timing wrong. AOL only went free in the past few years, after its subscriber base had massively dwindled. Going free didn't make it an albatross, it was the last ditch effort to turn it into something reasonable after the paywall had almost killed the business.
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Anonymous Coward, 4 Jun 2009 @ 1:44pm

Re: Re: Apostrophe abuse
Since the abbreviation for Corporation is Corp, you are incorrect. Corp is singular, Corp's is possesive, Corporations is plural.
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Anonymous Coward, 4 Jun 2009 @ 2:55pm

Re: Re: Re: Broadcast TV
It only works if the price per ad is enough to make it worth sending the stuff online. It is very likely not to reach that level.

It's the reason why even in broadcast, shows that don't get huge numbers get tossed. 5 million viewers isn't enough to pay the bills. It is only when things scale (and your costs remain effectively fixed) that they can make money doing it.

What it comes down to is each view costs something online. Each view in broadcast costs nothing. Given similar ad revenues per viewer, which one do you think is the better business model?
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Anonymous Coward, 4 Jun 2009 @ 3:22pm

Re: Re: Miller and AOL
Mike, you don't think perhaps that AOL's lack of a broadband strategy had anything to do with it?

AOL was locked into their dialup world, a system that has been pretty much wiped out by DSL, cable, and even 3g wireless networking at this point. AOL's "solution" was to let you get your own ISP and then pay more for their content on top of it. It works when they are the dialup portal, but on a net basis, they were not better or no worse than using Yahoo as your home page. There was very little reason for someone moving to a broadband solution to pay their ISP and then pay AOL some more.

However, as mentioned, AOL continued to generate content like an ISP with massive amounts of income to work with, which in the end made it too expensive to operate. As a portal, they aren't making the type of money they wish they were making.

Basic history. Calling it a "paywall" is ignorant of how they got there.
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Anonymous Coward, 5 Jun 2009 @ 5:16pm

Re: I don't have a problem paying to watch shows
You are getting it from the source.

A client to pull vids from the networks would be a middle man. Think it through.
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