The Hulu-will-charge-you-money rumor mill is churning once again and the blogosphere has lit up with preemptively angered Hulu viewers vowing that they will never darken Hulu’s digital door again. Some call it greed, others point to nefarious pressure from ailing broadcast and cable operations, while some decry the end of a freewheeling era. They are all wrong.
Hulu charging for content is a good thing. In fact, it’s a necessary next step to get us where we need to be. Let me explain.
This comes at an awkward time, to say the least. The site’s CEO, Jason Kilar, admitted just weeks ago that the free site is profitable, taking in more than $100 million last year and on a run-rate to more than double that this year. Blunting that momentum would be foolish. But letting it run absent the burden of helping to pay for the shows it profits from would also be irresponsible, and not in a Father-knows-best “charging for content builds character” kind of irresponsible, but in a more “not taking advantage of the opportunity to take Hulu to the next level in benefit of the consumer” kind of irresponsible.
Just came off the stage at PaidContent 2010, a day-long summit here at The Times Center near Times Square, dedicated to the question of if/how/when people will pay for content. The timing is good -- as I wrote in January, The New York Times is planning to charge for content within a year or so, Hulu is considering a subscription model (not necessarily in place of but, I believe, in addition to its free service), and the eBook pricing dilemmas are causing sleepless nights.
I opened the conference with a brief assertion that fretting over whether people will pay for content is based on a mistaken assumption: that people have ever paid for content in the past. They actually haven't. Instead, people have paid for access to content. But in an analog world, access was gated by physical form factors like vinyl, newsprint, and movie theaters. As a result, the coincidence of form factor and content made us believe that people pay for content.
But people have never paid for content. Even when a daily newspaper was a necessity for the average home, the dime you paid a day (in the 70s) for a newspaper did not cover the print cost, much less the reporting. Instead, it was classified ads and auto dealers who footed most of the bill. And the hours we spent on TV and radio every day through the last half of the last century until the explosion of cable in the 90s, were all free. When cable finally asserted itself, people did not pay per show or even by channel (with the exception of premium movie channels). Instead, they paid for overall access.
A storm has been brewing at The New York Times for a while now. Ever since TimesSelect -- the paid digital version of the Times -- was cancelled back in 2007, the "content wants to be free" crowd has danced around its proverbial grave, singing the equivalent of "ding, dong, paid media is dead."
It's hard to argue against that viewpoint given the reality we're seeing: long-time newspapers closing their print editions entirely (see Seattle Post-Intelligencer), august magazines such as Gourmet shutting their doors, newspaper subscriptions at unprecedented lows, not to mention the power that Google has over the traffic that newspapers and magazines generate. Worse, our consumer surveys show us that 80% of US adults will choose not to pay for online newspaper or magazine content if they can't get it for free (see my colleague Sarah Rotman Epps' post on this for more).
It is amidst this maelstrom that nytimes.com is reportedly considering erecting a new pay wall -- one presumes a shiner, prettier one than the last wall, but a pay wall nonetheless. Read New York mag's take on the situation here. Not to put too fine a point on it, but this is a bad idea whose time has unfortunately come.
Today is the big day: when Comcast announces it has taken a controlling share of NBCU in the latest mega media merger. And though the media have been covering it rapaciously for months now, the obligatory reaction stories are now being posted, analyzing something we should really know by now, namely:
This deal isn't about clamping down on runaway digital video content to save cable's collective hide.
If you're not careful, you may run into people who assert the contrary. Rafat Ali of paidcontent.org, whose opinion I generally value, earlier today titled his remarks "Comcast-NBC Deal Isn't About Digital." By which he means it's not about purely digital content (generation or delivery). While that's true, when he then goes on to say that Comcast's digital moves (thePlatform, Fancast) don't have "the potential to change the game for the cable giant," he is 100% wrong.
Because the future of cable is entirely dependent on digital. The future of all media of any sort is dependent on digital. Ergo so is the deal.
Allow me to add my voice to the chorus of those applauding the fall of the Berlin wall twenty years ago this month. It was this event that taught me firsthand why revolution is simultaneously impossible as well as inevitable. In 1986 I sat with other students from around the globe just blocks from the wall and debated whether it would ever come down. The naïve among us insisted freedom was imperative: It was inevitable. The others asked if we had stopped to think about the massive relocation of people, economic resources, and government structures that such a revolution would require: It was impossible.
Until it happened, just three years later.
The author, pictured left, photographed in front of the Brandenburg
Gate from what was then the East German side
Today Roku launched two new players to complement the original $99 Roku player. Perhaps somewhat obviously, the two new players come in at $79 and $129, allowing Roku to test whether there's price elasticity in this market.
I'm not sure this was a necessary move. The cheaper box (called Roku SD), simply removes HD playback from the original Roku Player (now called Roku HD). The $129 version offers wireless-n wi-fi streaming to deliver dramatically better video quality. I don't personally need that since I hook up my Roku player -- which is in constant demand in my home -- via ethernet. (Yes, being a nerd has its advantages including a fully self-wired home that has over 24 ethernet ports in it.) So while I can see the value of the more expensive box for wi-fi users who have wireless-n routers (do you know if you do? betcha don't know), I think muddying the waters with 3 boxes instead of a maximum of 2 just feels like unnecessary complexity. A bit like Amazon announcing it would sell two versions of the Kindle in the US, one that's domestic only and one that can roam abroad, a decision doesn't appear likely to last very long.