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SteveHardeman 03-03-2010 10:06 PM
Hulu, the free site, facing some difficult choices
 
Interesting article that relates to the adult industry "free" issues as well.

Quote:
Hulu, the free site, facing some difficult choices

It may have to charge to continue running, but that could cost it viewers

Hulu's days as a free online video site could be ending soon.

Comedy Central's decision to yank two of the most popular shows on Hulu ? "The Daily Show" and "The Colbert Report" ? in a dispute over splitting ad revenue is the latest blow to the entertainment industry's attempts to make money off ads that run with free video.

Yet Hulu's most viable alternative ? charging for access to some videos ? could turn off viewers and crimp the site's explosive growth. Ultimately, the remedy to Hulu's current dilemma could leave the site even worse off, a poor shadow of its former self.
Story continues below ↓advertisement | your ad here

Many viewers are drawn to Hulu because of its ease of use, not because they couldn't get much of the same content elsewhere. Hulu's videos simply aren't exclusive enough ? compared with, say, Time Warner Inc.'s premium HBO cable channel.

If Hulu charges for a TV show or movie, the viewer could simply watch it over the air live, be more consistent about recording it to view later or catch the program for free through a video-on-demand service offered by cable TV and other providers.

"There are very few people who would be willing to pay for it," said Bruce Leichtman, president of the Leichtman Research Group Inc. in Durham, N.H.

He noted that viewers could simply ask themselves, "Why would I pay for it when I can get it on video on demand?"

Chase Carey, chief operating officer of Hulu co-owner News Corp., has said that the site would have to start charging for some video eventually, though he and other officials have been mum about when that would happen and what aspects would remain free.

Hulu has had trouble turning a profit because it doesn't pull in enough revenue to pay for operations. Online ads simply don't generate as much revenue as broadcast TV commercials.

In the latest blow, Hulu disclosed in a blog this week that Comedy Central would yank its shows from the site beginning next Wednesday.

Comedy Central and Hulu couldn't come to terms on how to share ad revenue, according to two people with knowledge of the discussions, speaking on condition of anonymity because they were not authorized to comment on private talks.

"The Daily Show" and "The Colbert Report" will still be available on sites run by Comedy Central, letting the Viacom Inc. network reap all of the ad revenue. About a half dozen other Comedy Central shows will also leave Hulu.

Given that "The Daily Show" is the third most popular show on Hulu, Viacom's exit is a big blow to the experiment by the entertainment companies that own it ? News Corp., Walt Disney Co. and General Electric Co.'s NBC Universal ? to see whether they can successfully make money off ads and bypass cable and satellite TV companies.

Traffic will likely take a hit as Comedy Central fans leave the site, and Comedy Central proves with its departure that it doesn't need Hulu to bring in online traffic and revenue.

The next step in the Hulu experiment will be to decide what and how much to charge.

But a Leichtman survey, released Tuesday, found that 81 percent "strongly disagree" with the notion of paying $9.95 a month for a service like Hulu, while only 5 percent "strongly agree" to pay.

For Hulu to successfully charge fees, whether monthly or on a per-video basis, it would have to offer exclusive or premium content that viewers couldn't easily get elsewhere.

Its owners certainly have a wealth of content to unleash ? but that would upset the cable TV, satellite and phone companies that offer video. These operators pay Hulu's owners fees to carry their cable channels and increasingly even local, over-the-air TV stations.

Content providers have had mixed success charging extra for video. HBO, CBS Corp.'s Showtime and Liberty Media Corp.'s Starz are able to charge a monthly fee on top of what viewers already pay their cable TV, satellite and phone companies. But others, such as the Disney Channel, have to be satisfied with staying on basic cable lineups.

If Hulu started charging, it would certainly crimp its growth. In December, less than three years since its launch in March 2007, Hulu delivered more than a billion videos, according to Web traffic measurement firm comScore Inc.

Regardless of whether Hulu charges, traffic would likely take a hit as more shows from cable channels become available for free online to customers of cable TV and other subscription services. Comcast Corp. began offering content from about two dozen channels online in December. Time Warner Cable Inc., DirecTV Inc. and Verizon Communications Inc. are following suit.

Hulu is essentially left without many options.

One scenario is for Hulu to merge free and paid content on its site. It could make the premium content available for a monthly subscription fee with options to rent or purchase shows a la carte, said Tony Wible, an analyst at Janney Montgomery Scott. Hulu will probably continue to have ads as well.

A fee-based Hulu could come with better content. Currently, Hulu carries TV shows that air for free on the broadcast networks, as well as some cable shows, older movies, clips and movie trailers. But if Hulu starts to charge, newer movies could hit the site.

However, the paid-video market is already crowded with rivals such as Apple Inc.'s iTunes, Amazon.com Inc.'s Unbox and Netflix Inc.'s online delivery of movies.

Hulu has to be different ? and that's not an easy task.
Sorry if it's been posted before but it's a good thought-provoking article.

starpimps 03-04-2010 01:55 AM
good read
thanks for the post

luv$ 03-04-2010 02:02 AM
dude your avatar looks JUST like an old buddy of mine who used to make bullets in the basement.

Every time I see it I get tripped out lol

BIGTYMER 03-04-2010 02:48 AM
Viva FREE Hulu.

Barefootsies 03-04-2010 03:51 AM
Quote:
Originally Posted by starpimps (Post 16918607)
good read
thanks for the post
Agreed.

The "free" business model will never work for all. Just as the tube site will not work for all.

There are different segments to this industry, and media in general. People keep trying to cram all of it into this nice little box of 'free', and/or ad driven revenue, and it will not fit.

Traffic tube dudes do not give a rat's ass about the longevity of the production side. The production guys are spitting blood about their shit being stolen to drive traffic and getting no revenue from it. The BROgrams are paying the traffic guys trying to get a few bucks from sales reinforcing the traffic tubes to stay in business.

There are many factors at play in this industry, and there is no one harmonious single minded vision beyond making money. Production guys do not give a rat's ass about traffic. Traffic guys do not give a rat's ass about content. A lot, not all, BROgrams do not give a rat's ass about consumers beyond the one time sign up, bang their card for max revenue. This is reinforced by a network of sites that have not been updated since 2001.

Free will work for traffic guys. But for the rest of the industry, needed for content, free is not a sustainable business model when there are costs to distribution and production. As long as it costs to pay models and staff. You are never going to have 'free'.

What people forget is, and this shows the age of some in this industry, that the 'free' Utopian internet dream was crushed in late 90's and early 2000's. It does not work. It has been proven. This is 10 years later and people saying, and doing, the same bullshit as back then. People will not pay, this and that. All said and done before.

Open a history book.
:2 cents:

EscortBiz 03-04-2010 05:04 AM
its almost impossible to go from free to paid and not destroy everything, once you spoil the surfer you cant undo it.

yahoo free mail to paud mail over 30 million accounts only 150 ended up paying)

ny newsday over 400,000 hits daily, they spent 4 million to build their paid version only 35 ended up paying

i can go on and on and you can argue that hulu is different, but its not, they will destroy it if they go paid, but its a business and not a charity and they must figure out a way to make money off it

the ad model dont work as the CTR on these sites is a joke

Barefootsies 03-04-2010 05:29 AM
Quote:
Originally Posted by EscortBiz (Post 16918887)
the ad model dont work as the CTR on these sites is a joke
:thumbsup

GABScott 03-04-2010 05:49 AM
Personally I believe the way is to maintain a basic free service with a pay for premium option, so say that the video is interrupted every 10 minutes with an ad, premium members get add free access and a higher quality stream plus the ability to save streams for offline viewing.... Free to end user for a basic product is here to stay but payment for premium features can and is already working in several market places. These services of course have to be priced right, there are price points that people will not even think about before making a purchase so say 99c an episode is nothing to most people, micropayments are the way forward. But hell what do I know, still people seem keen on these iphone app thingies at 99c a time.....

DWB 03-04-2010 06:03 AM
FREE as a long term business model just doesn't work.

This will also apply to adult. Sooner or later, this model will die out.

halfpint 03-04-2010 06:19 AM
Cant view any of thier videos over here in the UK They should have gone world wide a long time ago and not restrict the viewing to certian countrys only

SteveHardeman 03-04-2010 06:25 AM
Quote:
Originally Posted by luv$ (Post 16918614)
dude your avatar looks JUST like an old buddy of mine who used to make bullets in the basement.

Every time I see it I get tripped out lol
Now that you've divulged personal information about me I'm gonna have to put your name on one of those bullets. :-)

I have no idea who that dude is. Just thought it would make a good avater. All I know is if I had never shaved one time in my entire life since the beginning of me sprouting pubes, I would not have a beard that long.

I keep reading this article trying to get my brain to come up with some sort of solution. Thus far, no luck. It seems the very technology that made this industry one of the easiest ways to make big money is the same technology that is killing it.

The Heron 03-04-2010 06:40 AM
Quote:
Originally Posted by halfpint (Post 16918994)
Cant view any of thier videos over here in the UK They should have gone world wide a long time ago and not restrict the viewing to certian countrys only
They already cant' make money selling premium traffic think advertisers will pay more for nigerian traffic?

Caligari 03-04-2010 06:40 AM
Hulu sucks anyway.
They don't allow access in many other countries because i suppose they couldnt figure out how to merge international advertising....really weak.

With the exception of a few, their movies are freaking awful bottom of the barrel crap thats typically out of copyright and the only thing they had going of interest were the comedy central clips, family guy, american dad etc.

No one will pay for that imo

Caligari 03-04-2010 06:43 AM
Quote:
Originally Posted by halfpint (Post 16918994)
Cant view any of thier videos over here in the UK They should have gone world wide a long time ago and not restrict the viewing to certian countrys only
not even UK?? holy shit they suck. i know they dont have access in central/south america but UK and probably the rest of Europe? Screw those a'holes.

stickyfingerz 03-04-2010 07:03 AM
Quote:
Originally Posted by Caligari (Post 16919027)
Hulu sucks anyway.
They don't allow access in many other countries because i suppose they couldnt figure out how to merge international advertising....really weak.

With the exception of a few, their movies are freaking awful bottom of the barrel crap thats typically out of copyright and the only thing they had going of interest were the comedy central clips, family guy, american dad etc.

No one will pay for that imo
It FAR from sucks here in the U.S. I use it daily and love it. :thumbsup:2 cents:

Voodoo 03-04-2010 07:09 AM
You can't sell "Free".

TheDoc 03-04-2010 07:20 AM
"Hulu has had trouble turning a profit because it doesn't pull in enough revenue to pay for operations. Online ads simply don't generate as much revenue as broadcast TV commercials."

Hulu is applying the total cost of a production being paid for online vs through the tv, and saying it's not paying for operations. That's so lame.... they aren't saying Hulu isn't covering costs.

Hulu makes them money.... it just doesn't make them the big money like tv broadcasts do. And that's a problem for them.

If you people ever think 'free' is going away, you're going to be in for a very rude and sad awakening in about 20 years.

MaDalton 03-04-2010 07:54 AM
Quote:
Originally Posted by Caligari (Post 16919027)
Hulu sucks anyway.
They don't allow access in many other countries because i suppose they couldnt figure out how to merge international advertising....really weak.
no, it's because the copyright owners sell distribution rights for geographical areas and the local distributor would not be happy if the content is available for free while he had to pay for the rights.

Caligari 03-04-2010 08:00 AM
Quote:
Originally Posted by MaDalton (Post 16919164)
no, it's because the copyright owners sell distribution rights for geographical areas and the local distributor would not be happy if the content is available for free while he had to pay for the rights.
yes and you can get daily show, family guy etc on free TV in any other country and watch the ads, so why can't the copyright owner figure out how to sell ads in other countries on Hulu?

sweetcuties 03-04-2010 08:46 AM
Quote:
Originally Posted by Barefootsies (Post 16918763)
Agreed.

The "free" business model will never work for all. Just as the tube site will not work for all.

There are different segments to this industry, and media in general. People keep trying to cram all of it into this nice little box of 'free', and/or ad driven revenue, and it will not fit.

Traffic tube dudes do not give a rat's ass about the longevity of the production side. The production guys are spitting blood about their shit being stolen to drive traffic and getting no revenue from it. The BROgrams are paying the traffic guys trying to get a few bucks from sales reinforcing the traffic tubes to stay in business.

There are many factors at play in this industry, and there is no one harmonious single minded vision beyond making money. Production guys do not give a rat's ass about traffic. Traffic guys do not give a rat's ass about content. A lot, not all, BROgrams do not give a rat's ass about consumers beyond the one time sign up, bang their card for max revenue. This is reinforced by a network of sites that have not been updated since 2001.

Free will work for traffic guys. But for the rest of the industry, needed for content, free is not a sustainable business model when there are costs to distribution and production. As long as it costs to pay models and staff. You are never going to have 'free'.

What people forget is, and this shows the age of some in this industry, that the 'free' Utopian internet dream was crushed in late 90's and early 2000's. It does not work. It has been proven. This is 10 years later and people saying, and doing, the same bullshit as back then. People will not pay, this and that. All said and done before.

Open a history book.
:2 cents:
Well said man

czarina 03-04-2010 08:50 AM
interesting article; it proves that free content is NOT worth it!

MaDalton 03-04-2010 09:03 AM
Quote:
Originally Posted by Caligari (Post 16919180)
yes and you can get daily show, family guy etc on free TV in any other country and watch the ads, so why can't the copyright owner figure out how to sell ads in other countries on Hulu?
because then he cant sell the distribution rights anymore - cause no one would pay him the same money as now if he would not have the geographical exclusivity anymore. and as you can see from the article, the income from ads on Hulu is so low that it would never make up for the loss of the revenue from selling the rights

TheDoc 03-04-2010 09:23 AM
You guys are funny... knocking free as if it's a bad thing that failed.

If anything, this is a great example of the free model working exactly like it should. You create a great product, get control of a huge market, then introduce a paid model. If you tried to do the paid model before mass attraction, it would have failed before the doors opened.

Caligari 03-04-2010 09:42 AM
Quote:
Originally Posted by MaDalton (Post 16919428)
because then he cant sell the distribution rights anymore - cause no one would pay him the same money as now if he would not have the geographical exclusivity anymore. and as you can see from the article, the income from ads on Hulu is so low that it would never make up for the loss of the revenue from selling the rights
for 80 percent of the movies on hulu there are no rights to sell, they are public domain. if hulu is paying a dime for the majority of those movies they're nuts.

MaDalton 03-04-2010 10:08 AM
Quote:
Originally Posted by Caligari (Post 16919533)
for 80 percent of the movies on hulu there are no rights to sell, they are public domain. if hulu is paying a dime for the majority of those movies they're nuts.
well, since Hulu does not allow me to see it I wouldnt know what is up there. ;)

i was just referring to the article and Comedy Central

Comedy Central has its own channel on TV here and they probably make money by selling advertising. but over here they are always behind with the shows cause they need to be dubbed first etc.
so who would watch the old stuff on Comedy Central here if you could watch the new stuff on Hulu for free?


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