Hulu - Pay to Play?

Arvind Srinivasan — Thu, 04 Jun 2009 14:51:56 -0500

There was a time, not so long ago, when TV shows were only watched on TV. No, not the middle ages. Users increasingly want TV on demand on their computers, and luckily, in 2009, there are several ways to get it. One of the most popular is Hulu, which anyone can use to discreetly watch episodes of One Tree Hill with their backs facing the corner and headphones on.

Hulu has been incredibly successful since it launched as a joint project between Fox and NBC Universal. Since its launch, several other networks have signed on. Even though several sites, and bittorrent, offer a free, but illegal methods to get the same content, many users have felt that Hulu, due to its superior (almost HD) quality and minimal ads, is not only more convenient, but the guilt of "stealing" content has disappeared as well.

However, things might change. Jonathan Miller, Chief Digital Officer of News Corp, Fox's parent company, said in an interview that his vision of Hulu is a subscription based service. This, of course, is not a sure thing, as there is no official word from Hulu regarding the subject. But, Mr. Miller does have a stake in the service and that lends an air of credibility.

Would you be willing to pay monthly or annually for access to Hulu? Let us know in the comments.

NBC Crawls Back to iTunes

Carol Pinchefsky — Fri, 12 Sep 2008 06:02:00 -0500

During his keynote speech of September 9, 2008, Steve Jobs told his audience that NBC television shows, which include the popular Battlestar Galactica and The Office, will once again return to the iTunes store. This completed the circle of drama that NBC spun in August 2007, when the broadcasting company pulled their content from iTunes (effective December 2007) over a pricing dispute.

Zucker said, “We thought there should be variable pricing on our television content that was on the iTunes store, and when they didn’t want to do that, we withdrew our content. Here we are a year later. The fact is, we’ve now got variable pricing.”

Actually, no. Perhaps it is wrong of us not to let Zucker save face, but we believe his triumph is a tad misplaced.

The dispute did not stem from “variable pricing” but from an outright price increase. NBC insisted that iTunes raise the price of each NBC television episode, from $1.99 to a flat rate of $4.99 per episode.

Now iTunes offers high definition television at $2.99 for all of its content providers, including NBC.

According to analyst Raven Zachary of the 451 Group, “I’m not seeing variable pricing…. What NBC has done is increase the price of their television shows by providing a higher resolution of the show. It’s created a higher price point. [Zucker’s] quote sounded fairly misleading. It sounds like [he] made a compromise look like a win.”

"Now NBC are offering standard definition content for $1.99 alongside the higher-priced HD. That's the same $1.99 they found unacceptable a year ago, making their original reasons for walking out on Apple essentially absurd."

And although Zucker may call NBC’s return to iTunes a victory of contract negotiations, we say Steve Jobs’ reality distortion field generator should only be used by licensed professionals.

The fact is that, success of the Olympics notwithstanding, NBC’s ratings are consistently low and often in fourth place behind CBS, ABC, and Fox. Advertisers are most likely passing up NBC, and without iTunes, they’re also not generating licensing revenue, to the tune of $1.20 per episode.

Zucker, during an interview with CNBC, said, “We were able to achieve our goal … that not all content should be of the same value. Once we were able to achieve that goal, we were happy to come back on iTunes.”

Whatever tall tales Zucker is telling, NBC’s return to iTunes is still good news for NBC's following.

But it's better news for NBC.

Editor's Note: We have corrected an earlier mistake that stated that NBC shows were only avaiable in HD. NBC shows are available in both HD and SD format. We apologize for this error.

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Hulu - Pay to Play?

NBC Crawls Back to iTunes