TV Companies Plan To Make Hulu Suck Even More Making It More Difficult To Sell Hulu

from the well,-duh dept

Mon, Oct 3rd 2011 3:01am — Mike Masnick

We've talked about how the entertainment industry is really good at killing the golden goose every chance it gets. Any time some new online service actually gets people to move away from infringement, the industry freaks out and complains that they're not making enough money from the service and then tries to kill it. For example, the TV folks have made it clear that they'd like to kill Hulu even though they own it. They're so worried about "cannibalizing" the old revenue streams, that they're killing off the new ones as well. We predicted this would happen a few years ago, and it's amusing to see it happening in real time.

Because of the conflicts between what Hulu management (who do seem pretty clued in) and their ownership wanted to do with the company, Hulu was recently put up for sale. But, now it's coming out that the bids Hulu is receiving are much lower than the owners want -- and it's because they've made it clear they plan to cut off all free content from Hulu:

But the bidders all figured out pretty quickly that the TV companies who own Hulu now want to phase out free ad-supported content completely. So as soon as the current set of Hulu contracts expire in a couple of years, it would be back to the negotiating table.

Because of that, no one was willing to bid over $2 billion -- and the TV guys (of course) think it's worth a lot more than that, even as they're trying to kill it. Well, one exception: apparently Google was willing to pay closer to $4 billion... but it would only do that under certain conditions (which likely involve getting the TV guys to renew/guarantee future deals). So congrats, backwards looking TV guys, not only are you killing Hulu, you're killing the goodwill you build up via the company so you can't even cash out on that.

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Filed Under: free, online, open, tv
Companies: google, hulu

58 Comments

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Anonymous Coward, 3 Oct 2011 @ 3:15am

What was the definition of insanity?

Doing the same thing over and over but expecting a different result.
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That Anonymous Coward (profile), 3 Oct 2011 @ 3:25am

But this again lets them support their position that it is the "pirates" on the internet causing them to not make money.

The amount of money they "wasted" on Hulu is dwarfed by their claims of trillions of dollars in losses to people using bittorrent and cyberlockers to get the content ad free.

Even with the heavy handed 6 strikes approach they are trying to force in, the bandwidth caps several of them force onto their ISP arms, and the complete lack of any understanding what their business model should be today the true is inescapable. People want the content, people will make some small concessions to get the content legally, but if you demand total control and force more ways to extract revenue into the equation they will pick the other options available.

1997 gave us Netflix and the death of the video store. By demanding more and more cash they are working Netflix/Quickster into a failed business model. They released discs stripping out the special features, the silliest being removing the CC from the movie "Up" a movie with a character who uses a hearing aid and would need the CC service. They claim this was an oversight, but brought to light the "limited" discs they were willing to provide Netflix, as they had tried very hard to force Netflix to by directly from them by threatening other vendors.

In the around 12 years since Napster took the world by storm, they have spent millions of dollars on trying to wipe it from the face of the planet.
They ignored that idea that this is just where technology was going, and they should embrace the technology and find a way to make money with it.

2001 gave us the birth of iTunes, and the domination of Apple in the online music sales market. The labels have been dragged in kicking and screaming, they can not understand that at 99 cents they can still make money, maybe not as much as they did from physical media but they are not exactly in the poor house.
Apple forced the labels to give up on the concept of DRM, because the public screamed bloody murder about it. They now offer DRM'd tv shows and movies, but many people seem willing to deal with a 48 hour window to watch for a "decent" price.

There is nothing to see here, it is the media companies insisting that they can make everything like it was back in the 1980's when the CD was king, and VHS ruled the tube.

And the public can't even wait for one of them to fail, because they will be deemed to big to fail and we will have to bail out yet another business given carte blanche in the law, yet still can not seem to find a way to be profitable (if you believe their "studies" which no one actually does except politicians).
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Richard (profile), 3 Oct 2011 @ 3:35am

Re:
, they can not understand that at 99 cents they can still make money, maybe not as much as they did from physical media but they are not exactly in the poor house.

Actually at 99 cents they are making far more profit than from the old physical media - because they don't have to pay to make and ship the physical media. IN fact I reckon 99 cents is a racketeering price.

5c to 25c (depending on tracklength and quality) is a fair price - and there are services out there that charge in that range.
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Scooters (profile), 3 Oct 2011 @ 3:44am

Please, let's not wait two years. Kill it now.
When this site first launched, I was interested. Now, I couldn't care less about it. With so many options out there, it's just a sieve bleeding out cash by those foolish enough to give the business their money.

I understand those in charge know what to do with Hulu, but I have no sympathy for any business stupid enough to make deals with "Hollywood".

Yes, this means you as well, Netflix.

When will these companies ever stand up, band together, and tell "Hollywood" to go to hell already?

Jeez, this isn't rocket science. "Hollywood" can't make the rules if no one is buying their content and YouTube is more than proof people just don't give a shit where their entertainment comes from.

Learn from this.
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Svante Jorgensen (profile), 3 Oct 2011 @ 3:56am

Monopoly rents
The Monopoly Rents business is dying, save the Monopoly Rents business!
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Anonymous Coward, 3 Oct 2011 @ 4:02am

I would facepalm, but the force of the facepalm is directly porportional to the idiocy of the content industy.

I'd wind up destroying the tri state area!
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That Anonymous Coward (profile), 3 Oct 2011 @ 4:08am

Obligatory...
Content producers are killing the content production industry.
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That Anonymous Coward (profile), 3 Oct 2011 @ 4:16am

Re: Re:
Well I think part of their problem with that is with the switch to digital media really shines a light on their contracts, that they still get a breakage allowance from the profits based on vinyl albums.

They do not wish to part with any more money to the artists they claim to be worried about, and still look for every possible way to claim as much of each cent as possible.

I was always surprised Apple never wanted to get into the "indie" market by creating a system for band without representation to get into iTunes. But there are smaller systems in place covering this market, given how the big companies are determined to destroy the powerhouse outlets I expect it is just a matter of time until these platforms get more exposure.

I think part of the large labels problems is the idea if we charge less then people will assume it is inferior. We all see this played out in the consumer market all the time, the less expensive option is always seen as inferior in some way even if they come from the same factory. But I think there is hope - look at the growth in "store brand" and generic OTC drugs. People have finally learned that less cost does not mean less good. While some people will still pay top dollar for Nyquil many more people will buy the generic Nyquil when the sniffles hit.
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abc gum, 3 Oct 2011 @ 4:28am

Re: Obligatory...
backwards looking TV guys killed the Hulu star
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Anonymous Coward, 3 Oct 2011 @ 4:29am

Re:
The issue is simply there is no competition for the major labels and content producers, well other than piracy.

At the end of the day, you pay into their monopoly, break the law, or do without the entertainment.

Netflix and Hulu are distribution companies. That's the monopoly that Big Content has lost the profits on. They can't control distribution any more, much less profit from it.

These guys believe that they can print money if they can just get control again. And they might be right, at least until making movies becomes as cheap as distributing them. When people start abandoning CBS's newest laugh track comedy for an online stream, then you are going to see ISPs work harder to block youtube. Since they'll all be the same company then, it shouldn't be that hard.
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The eejit (profile), 3 Oct 2011 @ 4:50am

Re: Obligatory...
CAPTAIN OBVIOUS TO THE RESCUE! :p
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DS, 3 Oct 2011 @ 4:54am

Re:
What was the definition of stupidity?

Posting this stupid 'factoid' over and over again.
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Chris ODonnell (profile), 3 Oct 2011 @ 5:26am

>i>I was always surprised Apple never wanted to get into the "indie" market by creating a system for band without representation to get into iTunes.

Had Apple done this, they never would have been able to acquire the rights to distribute the major label stuff.
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grumpy (profile), 3 Oct 2011 @ 5:35am

Re: Please, let's not wait two years. Kill it now.
Hollywood has some clout now. Not a lot if you think about it but some. I'm personally looking forward to the day that the customers of [*]ollywood have good enough connections to make it worthwhile for the entertainment manufacturers to start streaming. Then our Western monopolies are going to simply disappear in a puff of smoke. Don't tell me that [*]ollywood is not going to produce for our markets if there's a buck to be made...
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Bengie, 3 Oct 2011 @ 5:37am

Re:
Lost trillions? That's preposterous. It was tens of trillions and nearing hundreds.

Why, the USA makes around 4tril/year. Limewire cause over 90 trillion of damage in only 5 years(industry claims).

Imagine, if Limewire didn't exist, no one in the entire USA would have had to work for over 20 years.

P2P causes so much damage, that if we just outlawed P2P, no one would have to work ever again.
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Marcel de Jong (profile), 3 Oct 2011 @ 5:51am

tv-execs: There, I can see a foot! Take aim! FIRE! Ouch, why does it suddenly hurt?
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Greg G (profile), 3 Oct 2011 @ 5:55am

Re: Re:
What was the definition of an asshat?

Calling someone stupid that uses a 'factoid' once, claiming that said person posts it "over and over again."
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Anonymous Coward, 3 Oct 2011 @ 6:00am

Re: Re: Obligatory...
He's my hero :)
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gorehound (profile), 3 Oct 2011 @ 6:06am

MAFIAA brains lie in the Anus Region.It is a proven fact there they have their brains located in the rear end and you can see this by their erratic and unstable behavior.

They need to be put down for good !!!
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Anonymous Coward, 3 Oct 2011 @ 6:10am

Re: Re:
10000 bonus points for highlighting CBS's lame laugh track comedies.
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Ninja (profile), 3 Oct 2011 @ 6:29am

And in the end they'll blame the bloody filthy pirates for everything and request for more draconian laws (to the point we'll see death penalty for copyright infringement).

It seems I'll be walking the death row at some point heh. Or not, maybe my country will keep walking the path of sanity and showing a big fat middle finger to the copyright excesses.
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Drak, 3 Oct 2011 @ 6:41am

Interesting notes
Even current practices on Hulu are very weird. I actually DID pay to subscribe to the premium to catch up on old shows through my web enabled Blu-Ray player which is very easy for me to use sitting on my ass on my couch. Sadly what I didn't realize is that Hulu won't allow me to see all the shows via my player (due to licensing restrictions) so I'm forced back to the FREE service with my TV now connected to my computer. Essentially they're forcing me to get up and use the mouse on my computer and NOT pay them vs. be comfortable and glean another $6-7 a month from me. It's funny that you can't even give them your money and then they complain about losing money.
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Anonymous Coward, 3 Oct 2011 @ 7:06am

http://edition.cnn.com/2011/10/03/business/china-yahoo/index.html

No worries China will buy the TV stations and start airing Chinese propaganda instead.

They already air everything the US has.
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Anonymous Coward, 3 Oct 2011 @ 7:07am

guys, you're forgetting... it's Hulu. They make you watch commercials even after you've payed, which is why even after people were leaving Netflix in droves, HuluPlus was not delivering the numbers they had expected. I don't know why people are surprised they're facing the same difficulty as everyone else.
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Anonymous Coward, 3 Oct 2011 @ 7:12am

Re: Please, let's not wait two years. Kill it now.
if you're going to keep blaming everything on "Hollywood", then you may as well call it Hollyweird like the rest of the a**holes so they know they've found a friend.
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Drew (profile), 3 Oct 2011 @ 7:13am

The part that really suprised me...
The thing I don't get is that Two Billion isn't enough. It's a company that employs 300 people. It's not Wal-Mart. It can't possibly have very much 'inventory overhead'. How can it *possibly* be worth $2,000,000,000.00 without any contracts going forward?
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Boost, 3 Oct 2011 @ 7:15am

Re:
I really don't mind the commercials...there's only like 2 minutes of them per hour (more like 45 minute) episode. So it's still a ton nicer than watching broadcast TV.
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Anonymous Coward, 3 Oct 2011 @ 7:17am

Re:
Damn pirates! http://www.cbc.ca/news/business/story/2011/10/03/pirates-global-economy.html
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Anonymous Coward, 3 Oct 2011 @ 7:21am

Re: Re:
I thought they'd lost shillions if dollars?
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Greevar (profile), 3 Oct 2011 @ 8:02am

This doesn't bother me.
I'll be getting my TV shows in the most convenient format I have always been getting it. I don't need Hulu and their owners' myopic perspective. Where they cause Hulu to fail others will find a way to succeed, it just won't be legal. Supply and demand cares not for what the laws say. If there is something people want, someone will find a way to get it to them and we will all be the better for it.
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Anonymous Coward, 3 Oct 2011 @ 8:04am

This just proves that the delivery method is less important than the content delivered. The value of Hulu isn't that they are delivering video over the internet, it is the high production value of the material being delivered. The fact that the business is less valuable without the content just further illustrates that innovative delivery (which Hulu is NOT) does not a sustainable business model make.

I think what so many people (MPAA, RIAA, freetard pirate advocates, etc..) fail to realize is that there are so many entertainment options now, the number of people seeking any single entertainment source is diluted. The entertainment industry erroneously blamed their diminishing market share on piracy when a great deal of the loss is due to the increased options available to consumers.

You speak quite often about lack of innovation in the entertainment industry but I don't think they should be concerned with content delivery, if their product is good enough people will seek it out - they need to be innovative with their content not the delivery method. Unfortunately, television has become stagnent with repetitive itterations of crime dramas and "reality" shows. There was a time in the 90's before so called reality TV became rampant, when people were watching TV. Now every show looks like another show and there is not much interesting programming - IMHO.
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jupiterkansas (profile), 3 Oct 2011 @ 8:21am

Re: Re:
Plus lots of people will pay 99 cents for a song when they wouldn't spend $12+ for the whole CD. They could have made a lot more money than before if they embraced it sooner.
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That Anonymous Coward (profile), 3 Oct 2011 @ 8:40am

Re:
I think Apple could have broken them...
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That Anonymous Coward (profile), 3 Oct 2011 @ 8:45am

Re: Re:
A Lonely Place for Dying.
Zenith.
and a little bit of Red State.

The competition is coming to the table, and the media corps are using their ISP arms to limit the bandwidth so you can't discover there are options.
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HothMonster, 3 Oct 2011 @ 8:50am

Re:
"You speak quite often about lack of innovation in the entertainment industry but I don't think they should be concerned with content delivery, if their product is good enough people will seek it out "

Yes people do seek out what they want, the problem is if all the official means to get the content suck ass people have no problem using unofficial channels. If the industry wants the profit they have to give customers a way to watch the content that they enjoy, otherwise someone other than the creator is getting the page views. Crippling the legitimate ways to watch content will not make people go back to watching tv like its 1980 it will only push more people to piracy.
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The Groove Tiger (profile), 3 Oct 2011 @ 9:01am

Re: Re: Re:
What IS (the definition of) a man?! A miserable little pile of secrets!
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The Groove Tiger (profile), 3 Oct 2011 @ 9:21am

Re: Re:
It's not about what you consider a fair price, but what people are willing to pay. Studies have shown that 99c is a bit of a sweet spot for many. Even a single cent over that causes a huge drop on sales.

May be psychological, but that's the free market for ya.
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JEDIDIAH, 3 Oct 2011 @ 9:32am

Delivery does matter.
If it were not for the PVR in the late 90s, I would have dumped TV entirely at the time as even then it seemed like cable was nothing but dreck. "Finding stuff" meant re-arranging your life around a broadcast schedule that may or may not work for you. Another superficial result was that content was effectively hidden since any time you would channel surf it seemed like nothing was on.

The S/N ratio was way to low even in the 90s.

If delivery is not up to snuff, people will stop bothering.

It's a whole new century and there's more than just TV and movies out there. Hollywood has to compete with EVERY THING including legal forms of free entertainment.

ABC has to even compete with Techdirt.
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That Anonymous Coward (profile), 3 Oct 2011 @ 9:40am

Re:
There is tons of content, and there most likely will not be a one stop shop created any time soon.

They should be concerned with content delivery, but only in how their made up rules make it impossible to market it to the entire globe at once.
Region coding, rolling releases, release windows... these are things the consumer hates. The only market system they had before allowed them to create these delays, but now any tv show, even the horrible ones, is available on a global network of content literally within a few minutes of the show's closing credits rolling.
They spend more time trying to reinvent DRM into a magic bullet that will let them get an extra nickel everytime you watch the content, and ignore they will sell less because the DRM limits the consumer to a single point of consumption.
It is not the early days of television when everyone stopped doing what they were doing because Uncle Milty was on, people now want to watch NCIS on the commute in the morning not at the perfect time slot the network picked. But to watch it on the commute legally means you need an approved player, a paid account, and you have to have even MORE advertising than had you taped it off the air.... or you can have a program catch the episode as soon as its out there, and it grabs it and loads it onto your player of choice so your ready to walk out the door in the morning, no commercials... no limits.
Now imagine being able to get a very high quality file from CBS directly with 1 lead in ad, that was viewable on any device... most people would pick the quality option and accept the tradeoff of the advertisement.

They need to shake themselves out of the "but we've always done it this way" mentality and get the consumers paying attention to them again... YouTube can be interesting, but it will not replace the newest episode of Dr. Who.
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Rikuo (profile), 3 Oct 2011 @ 11:07am

Re:
An honest question: Why was this post flagged, people? It's not insulting or abusive in any way...
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Rikuo (profile), 3 Oct 2011 @ 11:11am

Re: The part that really suprised me...
Simple, each of those employees, assuming they're all paid the same, 2billion divided by 300 = 6,666,666.6666666666666666666666667
Holy shit, Satan's taken over TV! Run for the hills!
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Rikuo (profile), 3 Oct 2011 @ 11:17am

Re: Delivery does matter.
Yeah, my viewing habits have changed entirely in the past few years. Growing up, of course I watched broadcast TV, but ever since I started working, I have yet to pay for a TV subscription. I don't watch Free Over the Air either. What I do is I download all my shows over the internet onto my computer. That way, I don't have to worry about scheduling.

The biggest change though is that I rarely watch what one would consider traditional TV shows anymore. In the whole of 2011, I've watched...Battlestar Galactica and maybe about five anime shows completely. What takes up most of my time is online blogs, articles and of course, the likes of Escapist/ThatGuyWithTheGlasses.com/EpicMealTime/LittleKuriboh...basically the online review genre that has exploded in recent years. As a kid, I would eagerly await the next episode of Yu-Gi-Oh...now I eagerly await the next episode of Yu-Gi-Oh Abridged. And all these shows that I love to watch nowadays? They're all FREE!
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MrWilson, 3 Oct 2011 @ 11:45am

Re: Re:
It's a spam message. The commenter's username is a hyperlink to some casino business.
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Rikuo (profile), 3 Oct 2011 @ 12:00pm

Re: Re: Re:
Huh. Seems a bit weird to me that we're flagging comments because of the username. Yes, I get it, everyone hates spam...but the comment itself is just neutral and meaningless. It doesn't say click on the hyperlink or anything.

Mike, I do have something to say about the whole hiding flagged comments business. It's something that has never sat well with me. Opponents of Techdirt do have a point when they say that we just hide and censor comments that we don't agree with. One modification would be to show the comment, but somewhere beside it or something, show that it was flagged by X amount of people, and have a few options to show why it was flagged. As my question indicates, I actually didn't know that it was flagged for being spam.
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Rich, 3 Oct 2011 @ 12:11pm

Re: Re: Re: Re:
How many roads must a man walk down... Oh wait, sorry, wrong game!
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That Anonymous Coward (profile), 3 Oct 2011 @ 12:54pm

Re: Re:
The infographic at the top sums it all up...

http://www.cracked.com/funny-4003-the-pirate-bay/
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Rikuo (profile), 3 Oct 2011 @ 1:04pm

Mike, what gives? I had a comment asking about the flagging of comments, and now its gone? Is it because you deleted the spam comment, that it automatically deleted the follow-on comments?
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That Anonymous Coward (profile), 3 Oct 2011 @ 1:52pm

Re:
If it is the comment I am thinking of, I flagged one earlier on today, it had a url embedded in the persons name that blindly redirected to a gaming website.

Normally flagged comments are left in place, much to the chagrin of US Marshals, but I think that this comment might have continued to add more traffic to that site as people did not understand the reason it had been flagged and clicked the url.
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Rikuo (profile), 3 Oct 2011 @ 3:03pm

Re: Re:
Yeah, that was the one. Basically, if we don't want Techdirt's opponents to be shouting that we censor comments too, then please don't do it again in the future.
I'll just repost what I had written.

Huh. Seems a bit weird to me that we're flagging comments because of the username. Yes, I get it, everyone hates spam...but the comment itself is just neutral and meaningless. It doesn't say click on the hyperlink or anything.

Mike, I do have something to say about the whole hiding flagged comments business. It's something that has never sat well with me. Opponents of Techdirt do have a point when they say that we just hide and censor comments that we don't agree with. One modification would be to show the comment, but somewhere beside it or something, show that it was flagged by X amount of people, and have a few options to show why it was flagged. As my question indicates, I actually didn't know that it was flagged for being spam.
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Rikuo (profile), 3 Oct 2011 @ 3:05pm

Re: Re: Re:
By "don't do it again, in the future" I of course mean keep any non-spam follow on comments. I can understand deleting the actual spam itself...just don't delete the non-spam that follows after it. Move the comments a bit further down the page or something.
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Anonymous Coward, 3 Oct 2011 @ 3:08pm

Re: Re: Re: Re:
Ah, Rikuo, I think I know what it is. Apparently, some SPAM type comments on a great many sites are now being moderated elsehwere or by Disqus or the various other sign ins available. What is happening however, is that once they're flagged, anyone replying to them is getting flagged as SPAM as well. Basically, if you see SPAM, let it slide. Don't reply to it. Don't flag it. Give it time, it'll go away by itself.

If you do flag/reply to it, yours will be flagged as well. And on some sites, I've already read that once you're flagged, you'll stay flagged as SPAM and thus more comments of yours will be removed as well. Not sure if that's the case here, but I know on a few sites I've seen this mentioned and discussed. So thought I'd point that out as a possibility.
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Rikuo (profile), 3 Oct 2011 @ 3:23pm

Re: Re: Re: Re: Re:
Okay, then, noted. Thanks...just would love to get Mike's official response on this.
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That Anonymous Coward (profile), 3 Oct 2011 @ 4:36pm

Re: Re: Re: Re:
I do not think his comment software allows for that to happen sadly. He touched on this in the post about the US Marshal request to remove the comment about Howell. Had he removed the comment, as they had asked, the entire thread underneath would have been lost and it was actually an interesting thread with a questionable starting point.

The AC Brigade will always claim they are being censored and deleted, this is the first time I am aware of a comment being deleted. Given what the site may or may not have been serving... (I viewed it via Google cache because I am paranoid like that) There is a chance there was malware or something of that nature to be there.

While comments can be downvoted into oblivion, they are 99.9% of the time still available to see if you click the text telling you its been squished. I think it is also part of the reason there is no edit function, to stop people from altering the past to then make claims of misdoing.

The other issue with moving follow ups would be people claiming Mike altered the context to support his evil freetard pirate anti-IP FUD campaign.

The "Neat Post" spam is the latest generation of spam techniques, that bypass many systems. The name was unique enough that I was curious what the embedded url was, but I am questioning enough to check it via Google rather than a direct click. Not everyone is the same, so it was dealt with. Most of the obvious spam is most likely held for moderation, I know I have posted multiple URLs in a single posting before and have tripped that check.

I know I'm not Mike but an AC once upgraded me to his right hand puppet... thats gotta count for something right? :)
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That Anonymous Coward (profile), 3 Oct 2011 @ 4:47pm

Re: Re:
I have reconsidered a position I had taken without giving it the full benefit of thought.

There is a one stop shop for content, TPB.
If you don't think they do it well, look at the numbers for Hobo with a Shotgun.
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athe, 3 Oct 2011 @ 7:01pm

Re: Monopoly rents
A hat, boot, dog and car are killing Monopoly Rents!
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monkyyy, 3 Oct 2011 @ 8:24pm

in 2 years pirating will be up, and they will learn just how wrong they are

maybe a hulu not run by idiots will show up
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Anonymous Coward, 4 Oct 2011 @ 5:35am

Hulu has sucked since the beginning.
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D Wilsn, 29 Apr 2013 @ 3:23am

Re: Double Pay, Double Standards
I must agree here. the double pay standard is the EXACT greedy ass business model I and a number of other people we're trying to avoid by "cord cutting" in the first place, let alone getting suckered back into it (which is what a lot of people like me felt after previewing such services as Hulu Plus)
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