Content: You Get What You Pay For

hulu-logoToday the news came out that Hulu, the excellent service where people can watch high quality network TV for free over the Internet (and was advertised during the most recent Superbowl), plans to start charging subscription fees in 2010.

As I write this, the often-expletive-ridden outrage of Hulu loyalists is being expressed all over Twitter, many people talking about how the service will suffer its demise by 2011, or that one of the best sites on the Internet is now ruined. I can’t remember whether it was my Mom, who always says “you get what you pay for,” or whether it’s all of the economics classes I’ve taken, but somewhere along the line I started to understand that nothing good is created for free. Therefore someone has to pay for it.

I understand that a Hulugoer might be outraged that they haven’t been charged, and now they are going to be. That’s a marketing issue. It would be like a credit card offering 0% interest and then just jacking rates up after 6 months to 30% without warning you when you sign up (which they do, of course, albeit in the fine print). But the fact that you would get all this good stuff served over a single high-performance streaming website for free indefinitely?

It’s hard because we haven’t had to pay before. TV was ad-supported, but now the vast majority of households skip ads via DVR and advertisers are finding many alternative marketing channels (like online word-of-mouth) to promote themselves. Ad revenue continues to drift downward as a result, and networks need to find a new model.

Beyond that, the era of socially acceptable piracy is in many ways still upon us. Many of us just expect the music, movies, or TV to be free because it is on Bit Torrent or in pockets of places online where it is being offered in a sponsored fashion (e.g. a free song to get you to try a new band). Torrenting content is illegal, and you are stealing from its creator. I used to Napster with the best of them in late 90’s (even while I worked at a software company that had to litigate for illegal use once or twice) and I have come to terms with this. I hope that eventually everyone else will too. Also, promotional content for free really is a privilege, not a right.

Finally, and probably the deepest problem in the enraged Hulugoer’s psyche is that many of them haven’t experienced trying to make a go of it as a professional musician, writer, or moviemaker. I think many people envision the creative process as a stroke of inspiration that strikes our best creatives during the 4-5 hours they work every day in between the times they are wooing the opposite sex or trying recreational drugs. The reality is that creating excellent content consistently, like any other profession, is an insane amount of work. The top creators of content, like top athletes or top investors, often have given up all other aspects of life to dedicate themselves to it.

One thing I like about blogging (in general) is that it gives people a taste of that. Merely producing enough content to keep people’s interest from week to week when blogging is an effort. Layer on top of that that the content has to be consistently GOOD, and you’ve got even more effort involved. Add to that that any blog with significant audience takes at least a couple years to get traction, and you’ve got a serious level of dedication required to get to the end result. Ninety-nine percent of new accounts on WordPress will never get there, this one included!

So good for you Hulu, I hope you succeed in getting a decent subscriber base. I think you will, but it will likely only be by offering shows that are not on “ad-supported” network TV. While the charade that your old model is still working continues, you will find it difficult to really fire up another one with the same content. But if it means less Reality TV and higher production value on the paid service, it’d be great to have an option for my buck to add to HBO.

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2 thoughts on “Content: You Get What You Pay For

  1. Solid post, Doug!

    For the most part, I agree with everything you’ve said (though I think there are some blurry lines with torrent – what if you’ve already watched, say, the latest episode of Fringe, but you want an archive of the season? How is torrenting the ep the next day different from recording to VCR back when?).

    I think the final analysis, though, will depend on what form this subscription model takes.

    In my opinion, if its something you can watch FOR FREE over the air or on another site (see all NBC, ABC, FOX, Comedy Central et al content), you’re basically sticking the gun to your head burying it behind a pay wall.

    I would fully support a (reasonable) subscription model if it meant 1) access to all past episodes of shows, not just the last five 2) access to HBO, Discovery, and other stuff not on Hulu now, 3) early viewing…so you could watch the Daily Show as it airs, not the following morning.

    In other words, I think the subscription model has to come with added value over what the site offers now, otherwise it’s just a giant middle finger to users.

  2. Matt, pumped to have you comment here. Thank you!

    I think we’re in total agreement that the right subscription model might work – but the offering has to be, as you mention, more valuable than and differentiated from the broadcast offering than it is today. I really like the specifics you mention.

    It’s a good point about torrent too, I don’t think they are categorically abused and TV is certainly the most legit use.

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