According to Read Write Web everyone is looking to Hulu as the future of Internet TV. The joint venture between several major networks, Hulu delivers free, ad-supported programming via online streams - an untested model for long-term profitability, at least when it comes to television.
While consumers have been enjoying the service since its launch in 2007, happily watching free TV shows and movies over their PCs and even their TV sets thanks to Media Center plug ins and other unofficial hacks, the company itself is still trying to navigate this new online landscape and effectively monetize their content. Now recent statements by a News Corp exec have people wondering: can Hulu make the ad-supported model work? Or does the company have other plans?
One of the primary objectives behind Hulu was to put free programming on the Internet to combat the rampant pirating of TV content that took place on sites like the popular file-sharing destination, The Pirate Bay. As iTunes did with music, the idea is to make using Hulu's service easier than having to go out and seek the illegal downloads.
Although iTunes charges for music on a per-file basis, Hulu, too has a business model that makes you pay - except in their case, you're paying with your eyeballs, not your credit card. Using video ads, Hulu has been attempting to monetize its service, but those efforts have been difficult at times. This spring, for instance, Screen Digest analyst Arash Amel claimed that Hulu had only sold about 60% of its ad inventory. "What we've seen is rapid growth in consumption, but the advertising isn't keeping up," he said.
While these figures, if accurate, could be reason for concern, many feel that the profitability of an online video venture of this nature takes time to develop. Eventually, the ad-supported model would work for Hulu as it has worked for numerous other websites and services, supporters claim. Besides, more recent deals seem to bode well for the site. Case in point, this month the Publicis Groupe announced a multi-million dollar ad deal that involved targeted advertising to particular Hulu demographics. The deal is said to represent a "significant increase" in spending on Hulu.
Despite the promises ad deals like this hold, there is still debate as to whether or not Hulu is going to stick to the ad-supported model or try something new. At a conference last week, News Corp. deputy chairman Chase Carey made a pronouncement regarding this point that raised more than a few eyebrows:
"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 was quoted in Broadcasting & Cable. "Hulu...needs to evolve to have a meaningful subscription model as part of its business." This seems to jive with earlier reports where News Corp. CEO Rupert Murdoch had also hinted at the site's plans to add premium services. "Are we looking at it with a view toward adding subscription services and pay per view? Yes we are," Murdoch had said.
But "looking at" and "doing" are two very different things - where does Hulu stand now? Has their core philosophy - that is, their belief in the ad-supported model - changed?
According to AdWeek, it has not. In the article the company claims their ad-supported free service is still the one that "resonates with the largest group of users" and that any additional models would just serve to complement that.
Despite any official confirmations from the company, it is clear that Hulu has intentions to launch value-added services on top of its free, ad-supported model in the coming months. These may include pay-per-view options and some sort of subscription model. However, that subscription model would be there to provide users with value-added services that they couldn't get from the free model alone. Perhaps behind the scenes interviews? Sneak peeks? Actor interviews? Who knows...but the possibilities are endless.
Why is this clear despite the company’s confirmation? It comes down to simple math: We've now seen three different statements about these premium services -Carey's recent remarks, Murdoch's quote from earlier this year, and anonymous sources quoted by Dan Rayburn in Streaming Media who hinted that Hulu's iPhone app won't launch until "Hulu rolls out a subscription based service."
The iPhone app, in fact, may be the real secret the company is trying to hide. Imagine if the much-rumored and highly anticipated application was linked to a subscription-based model. That could downright revolutionize the way people watch TV. Providing streaming content over the popular Apple smartphone would easily bring in additional revenue and that new source could quickly outperform the profits made by the ad-supported model.
Thursday, June 24, 2010
Free Television on the Web: Thanks Hulu
According to Read Write Web everyone is looking to Hulu as the future of Internet TV. The joint venture between several major networks, Hulu delivers free, ad-supported programming via online streams - an untested model for long-term profitability, at least when it comes to television.
While consumers have been enjoying the service since its launch in 2007, happily watching free TV shows and movies over their PCs and even their TV sets thanks to Media Center plug ins and other unofficial hacks, the company itself is still trying to navigate this new online landscape and effectively monetize their content. Now recent statements by a News Corp exec have people wondering: can Hulu make the ad-supported model work? Or does the company have other plans?
One of the primary objectives behind Hulu was to put free programming on the Internet to combat the rampant pirating of TV content that took place on sites like the popular file-sharing destination, The Pirate Bay. As iTunes did with music, the idea is to make using Hulu's service easier than having to go out and seek the illegal downloads.
Although iTunes charges for music on a per-file basis, Hulu, too has a business model that makes you pay - except in their case, you're paying with your eyeballs, not your credit card. Using video ads, Hulu has been attempting to monetize its service, but those efforts have been difficult at times. This spring, for instance, Screen Digest analyst Arash Amel claimed that Hulu had only sold about 60% of its ad inventory. "What we've seen is rapid growth in consumption, but the advertising isn't keeping up," he said.
While these figures, if accurate, could be reason for concern, many feel that the profitability of an online video venture of this nature takes time to develop. Eventually, the ad-supported model would work for Hulu as it has worked for numerous other websites and services, supporters claim. Besides, more recent deals seem to bode well for the site. Case in point, this month the Publicis Groupe announced a multi-million dollar ad deal that involved targeted advertising to particular Hulu demographics. The deal is said to represent a "significant increase" in spending on Hulu.
Despite the promises ad deals like this hold, there is still debate as to whether or not Hulu is going to stick to the ad-supported model or try something new. At a conference last week, News Corp. deputy chairman Chase Carey made a pronouncement regarding this point that raised more than a few eyebrows:
"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 was quoted in Broadcasting & Cable. "Hulu...needs to evolve to have a meaningful subscription model as part of its business." This seems to jive with earlier reports where News Corp. CEO Rupert Murdoch had also hinted at the site's plans to add premium services. "Are we looking at it with a view toward adding subscription services and pay per view? Yes we are," Murdoch had said.
But "looking at" and "doing" are two very different things - where does Hulu stand now? Has their core philosophy - that is, their belief in the ad-supported model - changed?
According to AdWeek, it has not. In the article the company claims their ad-supported free service is still the one that "resonates with the largest group of users" and that any additional models would just serve to complement that.
Despite any official confirmations from the company, it is clear that Hulu has intentions to launch value-added services on top of its free, ad-supported model in the coming months. These may include pay-per-view options and some sort of subscription model. However, that subscription model would be there to provide users with value-added services that they couldn't get from the free model alone. Perhaps behind the scenes interviews? Sneak peeks? Actor interviews? Who knows...but the possibilities are endless.
Why is this clear despite the company’s confirmation? It comes down to simple math: We've now seen three different statements about these premium services -Carey's recent remarks, Murdoch's quote from earlier this year, and anonymous sources quoted by Dan Rayburn in Streaming Media who hinted that Hulu's iPhone app won't launch until "Hulu rolls out a subscription based service."
The iPhone app, in fact, may be the real secret the company is trying to hide. Imagine if the much-rumored and highly anticipated application was linked to a subscription-based model. That could downright revolutionize the way people watch TV. Providing streaming content over the popular Apple smartphone would easily bring in additional revenue and that new source could quickly outperform the profits made by the ad-supported model.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment