RandomGuy
06-23-2011, 12:55 PM
Most analysis says it is not looking good for one of my favorit websites...
Beware the Hulu hoodoo
Business and management
SchumpeterInternet companies
Beware the Hulu hoodoo
Jun 22nd 2011, 11:10 by J.B.
..FANS of "Glee", “Family Guy” and “Grey’s Anatomy” take note. Hulu, an American video-streaming website, has apparently been approached by a buyer, rumoured to be Yahoo! The prospect of a hot young video website being taken over by a grizzled dotcom veteran brings reminders of YouTube’s purchase by Google in 2006. YouTube has been something of a money pit for Google: it has yet to announce it has turned a profit. Hulu isn’t a money pit at all. It’s a snake pit.
Whereas anybody with a flip-cam can upload a video to YouTube, Hulu contains professional television shows. Three broadcast networks routinely feed it: ABC, Fox and NBC. Disney and News Corporation (representing ABC and Fox) are equity partners in Hulu, and sit on its board. NBC used to hold sway, too, but it was forced to step back when it was bought by Comcast, a large cable company.
Hulu’s website is terrific. Its shows are well-organised and start streaming instantly. There aren’t many advertisements, and the ones that run are costly: Hulu claims it costs more to reach a person on its website than on a broadcast television network. For $7.99 a month, American viewers can upgrade to Hulu Plus, which gets them a bigger archive, a handful of cable TV shows, and access on mobile devices.
Great stuff—unless you’re a media company. Having launched Hulu as a rival to YouTube and pirate networks, media executives have gradually soured on it. Programme-makers complain that putting shows on Hulu saps DVD sales. Some fear that viewers are becoming accustomed to light advertising loads. Others worry that Hulu is making it harder to sell repeats to cable networks. Most of all, they fret that the easy availability of shows online will encourage users to “cut the cord” and drop their cable TV subscriptions. Since Disney, News Corporation and Comcast all own extremely profitable cable channels, they aren’t keen on that.
It is getting worse. Following a terrifying slump in TV advertising during the recession, the broadcast networks have become eager to extort more money from the cable and satellite companies in the form of “retransmission fees” for their channels. Fights over these fees have become vicious, with occasional blackouts of shows. And the presence of Hulu isn’t helping at all. Faced with a demand for retransmission fees from ABC, Fox or NBC, a cable or satellite operator can point out that the broadcasters already give their shows away online. Why should they pay?
Tensions between Hulu and the media companies that feed it have become obvious in the past few months. They unlikely to ease soon. If Yahoo! buys Hulu it will be plunged into a nasty, long-running fight between media companies and distributors—not the sort of thing a Silicon Valley firm is used to handling. Probably better to stay clear.
Basically the networks and content providers are getting ready to dump it or really jack the fees that Hulu pays.
It may survive, but not in its current form.
Beware the Hulu hoodoo
Business and management
SchumpeterInternet companies
Beware the Hulu hoodoo
Jun 22nd 2011, 11:10 by J.B.
..FANS of "Glee", “Family Guy” and “Grey’s Anatomy” take note. Hulu, an American video-streaming website, has apparently been approached by a buyer, rumoured to be Yahoo! The prospect of a hot young video website being taken over by a grizzled dotcom veteran brings reminders of YouTube’s purchase by Google in 2006. YouTube has been something of a money pit for Google: it has yet to announce it has turned a profit. Hulu isn’t a money pit at all. It’s a snake pit.
Whereas anybody with a flip-cam can upload a video to YouTube, Hulu contains professional television shows. Three broadcast networks routinely feed it: ABC, Fox and NBC. Disney and News Corporation (representing ABC and Fox) are equity partners in Hulu, and sit on its board. NBC used to hold sway, too, but it was forced to step back when it was bought by Comcast, a large cable company.
Hulu’s website is terrific. Its shows are well-organised and start streaming instantly. There aren’t many advertisements, and the ones that run are costly: Hulu claims it costs more to reach a person on its website than on a broadcast television network. For $7.99 a month, American viewers can upgrade to Hulu Plus, which gets them a bigger archive, a handful of cable TV shows, and access on mobile devices.
Great stuff—unless you’re a media company. Having launched Hulu as a rival to YouTube and pirate networks, media executives have gradually soured on it. Programme-makers complain that putting shows on Hulu saps DVD sales. Some fear that viewers are becoming accustomed to light advertising loads. Others worry that Hulu is making it harder to sell repeats to cable networks. Most of all, they fret that the easy availability of shows online will encourage users to “cut the cord” and drop their cable TV subscriptions. Since Disney, News Corporation and Comcast all own extremely profitable cable channels, they aren’t keen on that.
It is getting worse. Following a terrifying slump in TV advertising during the recession, the broadcast networks have become eager to extort more money from the cable and satellite companies in the form of “retransmission fees” for their channels. Fights over these fees have become vicious, with occasional blackouts of shows. And the presence of Hulu isn’t helping at all. Faced with a demand for retransmission fees from ABC, Fox or NBC, a cable or satellite operator can point out that the broadcasters already give their shows away online. Why should they pay?
Tensions between Hulu and the media companies that feed it have become obvious in the past few months. They unlikely to ease soon. If Yahoo! buys Hulu it will be plunged into a nasty, long-running fight between media companies and distributors—not the sort of thing a Silicon Valley firm is used to handling. Probably better to stay clear.
Basically the networks and content providers are getting ready to dump it or really jack the fees that Hulu pays.
It may survive, but not in its current form.