Stop Overreacting: Hulu Not Ditching Free Yet

from the hold-your-horses dept

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.

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

WSJ Editor: Those Who Believe Content Should Be Free Are Neanderthals

from the that,-or-people-who-understand-economics dept

Danny Sullivan has an excellent analysis of some of the more ridiculous statements from WSJ managing editor, Robert Thompson, trashing pretty much everything online. Most of Sullivan's analysis focuses on how ridiculous it is for Thompson to claim that Google makes news readers "promiscuous," so I won't address that again (though, you really should read Sullivan's writeup). Instead, I wanted to focus in one little bit that Sullivan mentions, but doesn't explore too much (other than to mention how insulting it is). Thompson declares that there are "three types of people" online, starting with:

There are the net neanderthals who think everything should be free all the time.

Pretty scary that someone who's the managing editor of the most well known and well-respected business newspaper out there thinks this, huh? First off, I don't know anyone who thinks "everything should be free all the time." People are more than willing to pay for scarce goods of value. Where they fundamentally have issues is with being charged for content that can be made free at no additional cost. And that's not "neanderthal" thinking, it's good old classic economics -- the kind we thought the WSJ supported.

And, of course, this also shows Thompson fundamentally not understanding the debate. For many, many years there's been plenty of "free content" in the terms of "free to the consumer" but which is supported in other ways. As Sullivan points out, News Corp., which owns the WSJ, also owns Fox -- which delivers free content, over the air, to consumers, but supported by advertising. Is that a Neanderthal opinion?

It really makes you wonder what they're thinking over at the WSJ or what sort of business smarts they have when they both consider Google to be a problem and think that basic economics on content pricing is "Neanderthal." It should call into question their thinking on other business topics as well. And, remember, this is the same company that is lashing out at "aggregators" like Google News, at the very same time that it's offering its own aggregator as well. If Thompson thinks Google News makes people promiscuous, why does his own site offer something similar?

Filed Under: content, economics, free, robert thompson

The Debate Is Not Free vs. Paid

from the that's-over dept

Michael Scott points us to a column by Shelly Palmer that clearly articulates a point I've tried to make in the past, but haven't been able to make that clearly: arguing "free vs. paid" is the wrong debate. Professional content is always paid for somehow -- it's just a question of how. In some cases it's a third party paying. In some cases it's a user paying. And, in some cases, it's a user paying not with money, but with something else, like time or attention, which helps give a third party the reason to pay:

Can you frame this conversation as free vs. paid? No. Not if you are trying to get someone to pay you cash directly for something that is ubiquitously available for free. Free vs. Paid is not the great debate, it's a no-brainer -- free wins! Valueless vs Valuable, Scarce vs Ubiquitous, Demanding of attention vs Commanding of attention are the debates and the winners will be the individuals and organizations that can most effectively translate the value of content into wealth.

Exactly. This is why the focus on "free" is almost always misplaced. People stop thinking once they hit that big oval zero -- and forget that free is simply a part of a larger business model, which is often about bringing in a larger audience that gives other reasons to pay.

Filed Under: debate, free, paid

Dungeons And Dragons Online Highlights How Free Can Work As A Part Of A Business Model

from the nice-job dept

Pretty much everyone who reads Techdirt seems to be sending over the story of how Turbine has changed the business model for Dungeons and Dragons Online, going away from charging people $50 for the game and then $15/month to play, to a model where you can play for free and there are additional benefits to actually paying. And, so far, it seems like a massive success. Many more people are playing than before... and many of those who would never have paid (or played!) at all are realizing that there are good reasons to pay for some things within the game. While these sorts of situations can be a fine balancing act (if the company gets too focused on trying to convince people to pay, it could make the free stuff annoying), it appears that Turbine has done a good job finding a sweet spot -- making sure that if you just want to play the game for free, you can absolutely do that and it's perfectly enjoyable all the way through. Putting money into it just gives players certain additional benefits that they feel is worth it. Suddenly, paying the company money becomes a reasonable per transaction situation, rather than an ongoing chore. While it's still early, it should be worth watching to see how well this particular business model experiment goes -- but the early indications suggest that it's yet another example of how "free" can work as a part of a business model.

Filed Under: business models, dungeons and dragons, free, mmo, online games
Companies: turbine

Steve Ballmer Declares 'Free Is Not A Business Model' -- Apparently Unfamiliar With Microsoft's Free Products

from the check-'em-out,-steve dept

Josh W points us to an article about Microsoft new mobile phone software that contains an odd quote from Steve Ballmer, responding to a question concerning Microsoft's plans to compete with Google's free Android mobile operating system:

"Free is not a business model," he said. "We are a commercial company, we will look to gain revenue and profit from our activities. You'll have to ask our competitors if they'll make money on free things."

Internet explorer. Bing. Microsoft's new security software. All free. All offered by Microsoft. Is Steve Ballmer admitting that he doesn't know about any of these things... or is he just expecting that the reporter and the readers of the article are flat-out stupid? Clearly, Microsoft seems to recognize that free is a part of lots of smart business models, so why is its CEO apparently acting clueless on this front? As clearly anyone who thought this through knows, free by itself is not a business model, but free, in combination with a larger business model often makes a lot of sense. That's what Google is doing, and it's what Microsoft is doing as well. So why is Steve Ballmer pretending otherwise?

Filed Under: android, business models, free, steve ballmer
Companies: google, microsoft

Another Author Notes That Giving Away His Book Increased Sales

from the piracy? dept

Dave points us to a recent interview with Lester Brown, who's been pushing for alternative energy for years. I'd actually heard about his book, Plan B 4.0: Mobilizing to Save Civilization a few months ago when someone pointed out that he was giving away his book for free, but I hadn't heard much more about it. Yet, in the interview, he mentions that the book can be downloaded, which appears to surprise the interviewer, who seems to assume that this means the guy is willing to give up revenue to get his ideas out there by noting "you do feel strongly about this." But then Brown points out that it's not hurting sales at all, but quite the opposite:

Dr. BROWN: No problem. Incidentally, "Plan B 4.0" is online at earthpolicy.org. It can be downloaded free of charge.

FLATOW: No kidding.

Dr. BROWN: Yeah.

FLATOW: Wow. You do feel strongly about this.

Dr. BROWN: Yeah. And it's interesting, people think this must reduce sales. In fact, it increases sales.

(Soundbite of laughter)

Dr. BROWN: Just between the two of us

Of course, this is hardly the first author to recognize this, but add another one to the pile. It's about recognizing that obscurity is a bigger risk that piracy, and then figuring out how to get more attention and then giving people a real reason to buy on top of that attention.

Filed Under: business models, ebooks, free, lester brown

Edwyn Collins Can't Give Away His Music Thanks To MySpace, Warner Music

from the thanks-guys dept

Mesanna alerts us to a blog post from the wife/manager of pop singer Edwyn Collins discussing the hellish experience she's gone through trying to offer up Collins' most famous song, A Girl Like You, on MySpace. Collins owns the copyright and wants the music to be freely downloadable by anyone, but Warner Music claimed that it owns the copyright, even though it does not:

At the beginning of this year I noticed that Edwyn's myspace had gone bit wonky and I tried to upload the tracks back on to the music player. His most famous track, which he owns the copyright in, as he does for most of the music he's recorded in his life (preferring to go it alone than have his music trapped "in perpetuity" to use the contract language of the major record company) is called A Girl Like You. It's quite famous. Lo and behold, it would not upload, I was told Edwyn was attempting to breach a copyright and he was sent to the Orwellian myspace copyright re-education page. Quite chilling, actually. I naturally blew my stack and wrote to myspace on his behalf demanding to know who the hell was claiming copyright of Edwyn's track? Which, incidentally, he always made freely available for download on myspace, something which amazed his followers. Eventually, after HUGE difficulty, I was told Warner Music Group were claiming it. I found a nice lawyer guy at Warners, very apologetic, promised to get it sorted, but all these months later it isn't. That is because Myspace are not equipped to deal with the notion that anyone other than a major can claim a copyright. Warner's were one of the lead petitioners in the attempt to put those three stoner lads in Sweden in prison recently, remember.

Meanwhile, the song which Collins wants to give away, but cannot, is being sold all over the internet... but not by Collins. Instead, it's by major labels who have no right to do so, according to Collins' manager:

A Girl Like You is available FOR SALE all over the internet. Not by Edwyn, by all sorts of respectable major labels whose licence to sell it ran out years ago and who do not account to him. Attempting to make them cease and desist would use up the rest of my life. Because this is what they do and what they've always done.

Wait... major labels... selling a song they don't have the right to, and not giving any of the money back to the artist? That seems a hell of a lot worse than just sharing a song for non-commercial reasons, doesn't it?

Meanwhile, Collins has no problem with the sharing of bootlegs:

Andrew Loog Oldham said that getting ripped off (by the industry) was your entrance fee to the music business of the sixties, so get over it. He's right and things have not changed. We are very over it, but nonetheless aware of who the biggest bootleggers around are. It's not the filesharers. Personally, we've always loved bootlegs. Even when Edwyn was really skint at the fag end of the eighties, I remember being in Camden market and seeing some tapes of a couple of his shows on sale. I tried to buy them but the stallholder somehow knew who I was and said "free to the management." I failed to see how that guy selling tapes of Edwyn or even U2 or anybody on the list of signatories above could harm their career.

And... then at the end, she's got a nice little message for the Featured Artist Coalition and its silly petition to try to stop file sharing:

The gig's up. You might as well take a position about when you want the sun to come up in the morning. It's over. Now let's get on with working out a wonderful new way for music lovers to enjoy music for free or for a small subscription that makes it legal and easy to hear ANYTHING and allows the artist to reap the rewards of such freedom of access. Viva la revolucion!

Filed Under: bootleg, copyright, edwyn collins, free, music
Companies: myspace, warner music group

Did Showtime Benefit By Giving Away Free Content?

from the apparently dept

Here is yet another example of how "free" can co-exist with paid content, even when the content is basically identical.

Recently, Showtime made the season premiers of their hit shows DEXTER and CALIFORNICATION on YouTube for anyone to watch for free.  So, did this gut their numbers when the shows aired on their subscription-only, kind of expensive if you ask me, premium cable network?

Both Dexter and Californication scored some huge opening numbers last Sunday with Dexter setting a new opening record for the cable network.

More than 1.5 million sets of eyeballs tuned to the season four opener for Dexter and 821,000 stayed to watch the opener for Californication. That's 3 million single eyeballs for Dexter and more than 1.6 million for Californication.

Guess not.

Crossposted from MyMediaMusings

Filed Under: californication, content, dexter, free, showtime, tv

That Whole Watch An Ad To Get Content Thing? Patented... And The Patent Holder Has Been Suing

from the watch-out dept

So we were just talking about some new company called Free All Music, which has a plan to let people download free mp3s if they agree to watch a video ad first. I have my doubts about how well it would work... but apparently the company may also need to watch out for another issue: a bogus patent. You see, there's some company called Ultramercial, who not only holds a US patent 7,346,545 on the concept of distributing content where the user can get it for free after watching an ad, but Ultramercial recently went legal. Just a few days ago, it sued Hulu, YouTube and WildTangent for infringement over that very patent. Seriously, USPTO? A patent on watching an ad before getting free content? This is why patent examiners get such a bad rap.

Filed Under: ad supported music, free, patents
Companies: hulu, ultramercial, wildtangent, youtube

Filmmaker Discusses Creative Marketing, Freeing Up Movies, Embracing New Business Models

from the sounds-cool dept

Nathan Smith alerts us to an interesting interview with filmmaker Sally Potter, discussing her new movie Rage, which has a variety of unique and interesting facets to it. The movie -- which has a bunch of famous actors, including Jude Law, Judi Dench, Steve Buscemi, Diane Wiest, John Leguizamo and others -- is being released first on mobile phones, with a different part of it released each day for a week (I believe this past week). The film is supposed to be from the view of a cameraphone, so that makes sense. But, Potter has also worked hard to cultivate a strong fanbase through a variety of online methods. And, of course, she's all about embracing "free," embracing what the technology enables, and thinks the rest of Hollywood is a bit silly to live in fear and try to lock everything down:

FNB: It's true, everyone is talking about this, what is the economic model? Is there one?

SP: Not yet. The music industry is slightly ahead of us and had to go through the same thing already and it's shock, horror, terror, everyone's going to go bankrupt because everyone can have everything for free. Lots of resistance, I'm talking about filmmaking now, legislating against copyright and everything is watermarked, anxious, anxious, and all that. And I think my attitude is, go the other way. Open the gates, say "okay have it." It's free, it's yours and then if you want me to go on and make other things, you're going to have to complete the circle by going out and buying the DVD. Maybe in the future it will be some sort of subscription model but I always wanted to do that with this one.

FNB: There was a recent article we read that said the next generation of digital consumers still wants to pay to go to theaters. It's not mutually exclusive, which is calming to know that just because one is succeeding doesn't mean the other is going to disappear.

SP: Its not either/or, it's AND. It might make cinema owners and distributors sit up a little bit, and make it a more pleasant and thrilling experience to go to the theater, make the quality of the projection better, the seats more comfortable, make it back to the real beginnings of what joining together in a big group is all about. Similar people can have their own access to watch it home on Blu-ray, its one of the things that I do. I have a good screen and I watch things together with a group of friends. Comfortably lying about. And that feel just as true of a cinema experience as going to some wonderful cinema.

Indeed. We've been pointing out for the better part of a decade that going to the movies is a social experience, and the best way to do that is to make that experience better. Many theaters have started to catch on to this (finally).

Filed Under: business models, economics, free, movies, sally potter