Hulu is arguably the one good idea the TV conglomerates have had in the past ten years: put TV online, stick some ads in there, and show it for free. Unfortunately, the guys behind this good thing might be about ready to ruin it. A look at what’s going on with the Hulu tribe, today in Uproxx News.
Here’s the basic problem: the networks are still convinced that cable isn’t going anywhere, despite the fact that cable saw the first drop in subscribers ever this past August, and the trend has kept up. It doesn’t help that Netflix is currently rampaging through the entertainment industry, burning the crops of its enemies and glorying in the lamentations of their women. So they want Hulu to be more competitive and make more money…but have no idea how to make that happen.
Some of this confusion has already been shown in Hulu Plus, the service launched by the site to compete with Netflix. Unfortunately for Hulu, Hulu Plus is being crippled by two factors: one, that a lot of its content is already available for eight bucks, without ads, on Netflix; and two, that being able to watch network television, the main purpose of the whole endeavor, is great and all, but most network television isn’t popular in the first place. This is why Netflix made $2 billion in revenue last year and Hulu made a tenth of that.
Now, add into this mix the fact that one of Hulu’s stakeholders, NBC, has just merged with Comcast, one of the biggest cable operators in the US. Comcast is legally required to give up any management of Hulu, but considering that it just bought a huge broadcast network, that Hulu is essentially in direct competition with cable, and Comcast still has a financial stake in the company, Comcast’s opinions still have some weight. And just to add to the fun, it’s legally required to sell shows to some of Hulu’s competitors. Like Netflix and…hold on…there’s got to be another one…
This is probably reflected in the reported idea on the table for Hulu’s future, that it becomes an online cable operator, offering bundles of channels, because the Internet is limited by the same constraints as your cable company.
Why is it a bad idea? Never mind that bundling is actually a big part of the reason people hate cable in the first place; as we’ve reported previously, the annual argument between cable companies and the channels over how much they should grossly overcharge their customers has gotten increasingly ugly and this would put Hulu in the crosshairs for precisely that, driving up subscriptions every year and in turn driving away subscribers every year to the arms of competitors.
Ironically, bundling actually makes channels cheaper. In fact, if cable companies offered you only the channels you wanted to pay for, why, cable networks would have to compete on the free market for viewers! That would be horrible!
- In technology news, people were wondering what strategy AT&T would pursue in light of losing iPhone exclusivity. After all, much of their growth has been due to the iPhone and the iPad. Would they improve their network? Negotiate with Apple for better iPad access? Call Apple and leave dozens of voicemails begging for them to come back and then get arrested outside of Apple’s house, screaming about how Apple broke its heart? None of the above; AT&T has apparently decided that if Apple wants to be with Verizon too, why, they’ll just heavily promote Android phones! You know, like Verizon was doing before it got the iPhone. (Yahoo!)
- And in the latest round of “Facebook has absolutely no shame”, the social-networking monolith is allowing advertisers to push any status update, store check-in, or “liking” of a corporate page that involves them out to your friends as a “Sponsored Story.” Was the first customer Spam, because that would be some extremely tasty irony right there. (Associated Press)
KNOW YOUR STATS
- Netflix has 15 million subscribers, almost all of whom have a disc that they’re “going to get to pretty soon” sitting next to their TV while they stream “A-Team” episodes or the title at left. Yes, that is actually available for viewing on Netflix. (GigaOm)
- Cable companies spent $172 billion over the last fourteen years to improve their systems, and now a good chunk of their customers use those cables to…watch Netflix. (NCTA)
I want more like this!
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