Stop Overreacting: Hulu Not Ditching Free Yet

from the hold-your-horses dept

Fri, Oct 23rd 2009 12:21pm — Mike Masnick

A ton of readers here have been submitting various versions of stories claiming that Hulu is getting rid of free content. I'd been ignoring the story, because it's a non-story at this point. But people keep submitting it, so let's go through the details. Basically, at a Broadcasting & Cable event, News Corp. Deputy Chairman Chase Carey basically said that free content isn't the best way to monetize and that Hulu "concurs." Here's specifically how B&C reported it:

"It's time to start getting paid for broadcast content online," he said. Carey said that while everyone cites the infamous Jeff Zucker quip that "We'e exchanging analogue dollars for digital dimes," the industry continues to do exactly that. The strategy needs to be more than just fighting piracy and Google, he says.

"I think a free model is a very difficult way to capture the value of our content. I think what we need to do is deliver that content to consumers in a way where they will appreciate the value," Carey said. "Hulu concurs with that, it needs to evolve to have a meaningful subscription model as part of its business."

AdVerse had a quick chat with Carey too and posed the question, when exactly does Hulu start charging then? Carey, who says he's only been to one Hulu board meeting since arriving at News Corp., suggests there is still no timeline but supposes it's at least in 2010. Carey says that while throwing up a pay-wall around all content is not the answer, it doesn't mean there wont be fees for some specially-created content and TV previews

So... this is really no different than what was said a few months back, when News Corp's Jon Miller started saying that Hulu should add subscription offerings. It's the official News Corp. position, ever since Rupert Murdoch suddenly flip flopped and decided free content online is evil. All News Corp. execs have now been making noise about trying to charge for content.

But... Carey is just one board member, not Hulu management, and has only been to one board meeting -- this is hardly an official announcement. He even admits that a paywall is not the answer. This isn't anything official from Hulu. So, before we freak out about how dumb this is, let's wait and see what Hulu actually does. As we've been seeing the ad rates on Hulu can be quite impressive, and the site itself is still somewhat new. So, yes, giving up on free content would be dumb, and would just drive people back to file sharing for TV shows. But until we see what Hulu is actually planning, the claim that Hulu is giving up on free content simply isn't supported by what's been said.

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Filed Under: chase carey, free, hulu, tv, video
Companies: hulu, news corp.

38 Comments

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Bob Raymond, 23 Oct 2009 @ 12:29pm

This is exactly the time to overreact
Hulu users need to get upset NOW and send the message NOW that this is unacceptable. If they keep quiet and make no complaints then all the board morons sitting on the fence about such a change will start to think it's a good idea and they'll head down that path, ultimately hurting both the company and it's users.
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Anonymous Coward, 23 Oct 2009 @ 12:34pm

Re: This is exactly the time to overreact
concur, complaining and overreacting after the deed is done is pointless.
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Designerfx (profile), 23 Oct 2009 @ 12:34pm

ad rates?
The only reason the rates on hulu for ads are better is because there are *less* of them. Thus it's marginally less a pain in the ass than anything else.

Meanwhile, the paywall discussion created some interesting comments on dslreports, I think the idea here is that if they did subscription/no advertising (what an idea!) that people probably *would* be willing to plop down money if they actually kept listing shows instead of their jackaassery of not showing entire seasons or the other stuff that newscorp has been forcing (omg no boxee!) etc.

Add to that the idiocy of not thinking "hey, maybe we should have a link to *SELL* the seasons right from the episode list*. or a way to request old episodes. Honestly. Got to wonder what planet Murdoch is from, because wherever it is, his head is so far up his butt I don't know how he can see anything.
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Jon B., 23 Oct 2009 @ 1:02pm

Hulu is still a wee bit too unreliable to pay for. I've gotten stuck where I lose my connection, reconnect, and then can't skip ahead in the show to where I was due to the ads. Also, the quality is really good but not quite good enough. Good enough for ad-supported.
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Anonymous Coward, 23 Oct 2009 @ 1:04pm

All the bits I've read about this seem to imply that special content such as 'webisodes' or cast interviews and other extra would end up behind some sort of subscriber paywall, which seems stupid. Maybe I'm wrong about this, but I can't imagine either one being a feature people'd be willing to pay much for.

Offhand, rather than lock content that has a niche audience behind a paywall, the crunchyroll model seems more appropriate: let everyone have access, just let people pay a small amount for HD and immediate access. For example, if subscribers could watch a show at any time on it airdate, instead of having to wait for it to be added to hulu.

(Though to be fair crunchyroll has terrible subtitle quality, hence they are hated by many.)
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Designerfx (profile), 23 Oct 2009 @ 1:12pm

Re:
crunchyroll is crap. onepieceofbleach and youranimenow exist just because of how much crap that crunchyroll represents.

time and time again instead of fighting for their users they just gave in and put content behind a paywall.

/been through it with shinji
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HuluUser, 23 Oct 2009 @ 1:27pm

The only way I would pay
The only way I would think about paying for Hulu:

1. No ads. Why should I pay for my internet connection via cable, then pay to see the ads again? I can watch TV if that's the case.

2. More content with access. Hulu has limited content, they don't show a whole series and shows are only available for a limited time.
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Another AC, 23 Oct 2009 @ 1:31pm

Recapturing value
The problem is that it is impossible for them to recature value because they consider their stuff to have much more value than the customer.

Its kind of like that idiot on Craigslist that really thinks someone is going to pay $400 for a 36 inch tube TV just because they bought it 7 years ago for $1200. I laugh everytime it is relisted.
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Dark Helmet (profile), 23 Oct 2009 @ 1:35pm

Re:
"...such as 'webisodes' or cast interviews and other extra would end up behind some sort of subscriber paywall, which seems stupid."

Cast interviews, not so much...but I think webisode additionals could be EXTREMELY productive, particularly if they delve deeper into backstories not fully explored in the broadcast episode. This will work best for dramas, but I can tell you that I personally will catch the original broadcast of a couple of my favs (NCIS, for instance) because I don't want to wait for a download version. This is particularly true after cliffhanger episodes.

But imagine hints given towards the end of episode scenes that there is a larger backstory and then pre-commercial they give a short message saying there is an indepth webisode that explains that backstory on Hulu...where you can sell more ads AND possibly have a small subscription fee to get the content instantly (say 10/month per show, which would amount to roughly 4 uses or so per month, or 2.50/per). I would think that popular shows that have truly engrossing character with backstories would REALLY work with that format.

Also, for true fans, content owners need to think about what they control, which is the content. How can you monetize the interest in the content while utilizing your control over it?

How about Hulu top tier subscribers, or if there was a way to be a "Insider" for particular shows? Those people can submit their names to be the next murder victim on Law and Order. Or the Insider subscribers with the most total votes get to pick where the next crime scene is in a city/nation/etc.? These rights to participate I believe could really drive revenue AND traffic...
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Hephaestus (profile), 23 Oct 2009 @ 1:41pm

Had someone ask me what Hulu was ....
A few months back a neighbors kid asked me what Hulu was .... So I explained its a place to watch most US TV shows online, with limited commercials. the sarcasm in his voice escaped me.

He asked "Why would you use that? You can get RSS feeds with/of torrents for all US and foreign TV shows and automate the downloads" and "I dont want to waste time searching for it" ... Then I was shown how he was getting content. I was amazed ....

He and a bunch of other 13 year olds sets up Linux boxes, automated the downloading of their favorite broadcast TV, Cable TV, Pay (HBO, ShowTime), etc shows. Set up a database of what was already downloaded. Set up a shared distributed video and audio library with the ability to view shows from each others servers. What is truly amazing to me is that a bunch of jr Highschool students set this whole thing up in under a week. I suggested they post the entire project on sourceforge.net.

That brings me to my point and am in full agreement with mike ....

"giving up on free content would be dumb, and would just drive people back to file sharing for TV shows" ....

Some people, now that they have shared files, are never going to go back because they want, what they want, when they want it, and going through even the minor inconvenience of visiting a web site is to much. Its to late for sites like Hulu to ever charge for any content.
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Anonymous Coward, 23 Oct 2009 @ 1:47pm

Re: Had someone ask me what Hulu was ....
What amazes me is that they have the bandwidth to stream shows to each other (though maybe they aren't dl'ing high def?).
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Stuart, 23 Oct 2009 @ 1:48pm

Are we sure this is Mike????
Come on now. Mike? You can't be Mike. No overreaction, no twisting of the real story to prove your point. What is going on here. Are you maturing Mike?
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Jason, 23 Oct 2009 @ 2:31pm

And that is how you run a business...
...but what if there's the internet? The internet is a large powerful animal that could easily overpower you if it chooses. If there is the internet where you are running a business, your best bet is to make some noise by...rustling some paper or stomping your foot.

If the internet chooses to attack, your chances of surviving are slim...it could tear you apart.
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Anonymous Coward, 23 Oct 2009 @ 2:36pm

Re: Are we sure this is Mike????
I think you meant to say "Yeah, the stories I disagree with must be twisted overreactions!"
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Jason, 23 Oct 2009 @ 2:42pm

Re: And that is how you run a business...
...but what if there's the internet? While it may appear awkward and shy, the internet's inner nature is vengeful and petty. Making noise will not help. It may only serve to remind the internet why it targeted you in the first place. Your best bet is a paywall. You should already have practiced setting up a paywall in safer times. You must move quickly.
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Anonymous Coward, 23 Oct 2009 @ 2:45pm

Re: Re: And that is how you run a business...
...but what if there's the internet. If there's the internet while you're running your business, there's almost nothing you can do. The internet's soul is to primitive and un-evolved to have developed a sense of right and wrong. Setting up a paywall will do you NO GOOD. The internet already has your content elsewhere for free. Your best bet is to get on your knees and make peace with a real, workable business model.
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Anonymous Coward, 23 Oct 2009 @ 3:02pm

"We're exchanging analogue dollars for digital dimes,"

That's the best description on this situation I've heard yet.
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AnonCow, 23 Oct 2009 @ 3:10pm

Hulu and their network overlords need to remember that digital dimes from Hulu ads are better than the digital or analog bupkiss they earn when I download a torrent instead...
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AnonCow, 23 Oct 2009 @ 3:22pm

"We're exchanging analogue dollars for digital dimes" BULLSHIT

That is like saying "we're exchanging buggy whip dollars for leather gear shift cover dimes".

The analog dollars don't exist anymore (or won't exist for much longer). The analog dollars are not being traded or stolen. They are obsolete and nobody uses them anymore. The new currency is digital dimes and Hulu and the networks need to "learn how to earn".
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Jason, 23 Oct 2009 @ 3:27pm

Re:
Exactly. I am more than happy to watch commercials on Hulu because it's faster and more convenient than a download and provides better quality than what I can stream for free without commercials.

ALSO, I think they drastically undervalue their advertising if it's cheaper than TV. NO WAY you or I or anybody sits through ads watching TV anymore. But Hulu ads are too short to let me go pee, and there's no benefit to pausing and no way to skip.

PLUS, TV could NEVER be as well targeted as HULU can. Self-selected content, browser full o' cookies, and a captive audience - why aren't more advertisers on board? What Hulu really needs is some decent salespeople!!
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Jason, 23 Oct 2009 @ 3:29pm

Re:
Oh, people use buggy whips AND they'll pay a premium for discretion.
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Chris R, 23 Oct 2009 @ 3:46pm

who cares?
who wants to sit at their computer and watch TV anyway?
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Anonymous Coward, 23 Oct 2009 @ 5:54pm

hulu ?
watz that
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kvillmer (profile), 23 Oct 2009 @ 6:37pm

Re: Re: Insider
That "Insider" concept is excellent.
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tom, 23 Oct 2009 @ 7:01pm

Hulu, I love for your basic principle of freeness. You already have adds in the programs like FREE TV and that is the limit. No double dipping! I already watch your ads in-program, I will NEVER pay for programing I already pay every month in my cable bill.

Sorry to hears this news, but if it happens, my family is gone. BTW, how can you do this when so many people are unemployed. Did you hire some stupid 20 something to run your company? Wouldn't be the first time. Grow a brain.
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stuff, 23 Oct 2009 @ 7:11pm

really?
Hulu, I love for your basic principle of freeness. You already have adds in the programs like FREE TV and that is the limit. No double dipping! I already watch your ads in-program, I will NEVER pay for programing I already pay every month in my cable bill.

Sorry to hears this news, but if it happens, my family is gone. BTW, how can you do this when so many people are unemployed. Did you hire some stupid 20 something to run your company? Wouldn't be the first time. Grow a brain.
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stuff, 23 Oct 2009 @ 7:12pm

really?
Hulu, I love for your basic principle of freeness. You already have adds in the programs like FREE TV and that is the limit. No double dipping! I already watch your ads in-program, I will NEVER pay for programing I already pay every month in my cable bill.

Sorry to hears this news, but if it happens, my family is gone. BTW, how can you do this when so many people are unemployed. Did you hire some stupid 20 something to run your company? Wouldn't be the first time. Grow a brain.
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Andy, 23 Oct 2009 @ 8:53pm

Bad Move
I think this is a very bad idea, and they should come up with a way to keep it free and increase revenue. More advertising or another method.
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Anonymous Coward, 23 Oct 2009 @ 9:38pm

Hulu has to add more than it does currently. They have continually lost my respect by bowing to the will of the corporations without thinking how it will affect their fans, they keep getting less and less appealing and I am continually looking back at illegal torrents as a far more appealing option. If they lock content behind a paywall they lose me and my eyes. If you can't give me content how I want it and make it as easy as tv then I don't want it. I am willing to pay for something only if I can get more value than I currently get. I already have netflix and I barely watch tv and China has plenty of places to watch my shows for free.
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minimalist, 25 Oct 2009 @ 8:26am

Re: who cares?
I do. My computer is the only TV I have.
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Omar Y, 25 Oct 2009 @ 9:35am

Overreacting is the thing to do Now
I agree with those who think complaining about something AFTER it has been implemented is pointless. I think you're taking things very lightly, I do acknowledge that we only have the comments of one new board member and Murdoch's plan to charge for everything, so we can pretty much take this as a given. Hulu WILL charge for content. Thing is, there's always somewhere else to get content, Hulu will screw it up. Why would people pay for several similar services? Netflix, Hulu, Cable/Satellite? Don't think so, Hulu is the only one to lose.
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Anonymous Coward, 25 Oct 2009 @ 9:11pm

It seems that Hulu isn't quite there yet.

However, with NewsCorp Deputy Chairman Chase Carey looking at Hulu and trying to determine how to monetize it, it seems he really didn't learn a lot when working with John Malone when he spun off all his IAC shares.

Perhaps he needs a good ass kicking.

----------------
As required, here's my FTC disclosure:

I have not worked for, nor consulted with NewsCorp, Hulu, IAC, Liberty Media, Hughes, DirecTV, Starz, StarzEncore, HBO, CineMax, OnDemand®, OnDemand Express® or any of their contractors, subcontractors, or sub-sub or sub-sub-sub contractors in the past. I have no connection to any company listed. Personally, I just think that Chase Cary is an asshole who has no idea what the hell what he's doing and is trying to substantiate his job which would normally be eliminated through routine quarterly reviews.
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Spocky, 25 Oct 2009 @ 9:15pm

An Alternative?
I don't want to have to pay for hulu because frankly, I'm not set up to do transactions online. That said, if things have to change, I'd be willing to deal with more ads to keep hulu free, or even a system that pauses hulu if it isn't the active tab/window during ads (so that the show itself could still exist in the background, just not the ads). I'm sure such a system could be bypassed, but I feel it would at least increase the value of the ads some, as not all would block/care enough to block.
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Anonymous Coward, 25 Oct 2009 @ 9:17pm

Does OnDemand Express® exist? I just made that one up.
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Anonymous Coward, 25 Oct 2009 @ 9:27pm

Re: An Alternative?
Yeah? So what's you alternative you whine about?
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Kari, 29 Oct 2009 @ 1:31am

Re: who cares?
Its called, you hook your computer up to your tv, then sit on your couch and enjoy.
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Anonymous Coward, 7 Dec 2009 @ 10:19pm

Re:
no pay for hulu. the end
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Clacker Valve, 17 Jan 2013 @ 2:54pm

Horrible Hulu Ads
We have the right to complain, don't care it's free or not and glad i never buy hulu plus and about the Ads keeps pausing every seconds like is annoying, if owner keeps it up should get fired or lose alot of customers. I ar with sads now
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