The death of free hulu?

by Josh Anderson

Posted: 15 years ago 18 replies

INTERNET MARKETING

In my business I get contacted by a lot of people who attempted to create ad supported podcasts by recruiting sponsors only to find it did not generate the kind of income that they wanted.

The ad supported model has finite income potential.

It appears that even some of the more successful video portals may be waking up to realize that bandwidth is expensive...

I mean not everyone has a sugar daddy like Google to flush a half billion dollars a year down the toilet streaming free videos to the world.

What many (even experienced) small publishers do not realize is that if you have in demand content many times you can re purpose free content and sell it...

It might be as simple as offering an OTO for the "best of" on dvd if you are running a free podcast. Or...

As News Corp may be about to try... switching to a premium model when you used to offer everything for free:

News Corp. sees Hulu charging fees for access - Tech and gadgets- msnbc.com

In the IM world we know the power of selling information...

Yet there are markets... especially the podcast market... where people just cannot imagine that someone would pay for content.

They are afraid to even try it.

If you know something that will save someone time, effort, and money they will pay for that information... its easier to get into than the entertainment business too because you don't need a flashy personality if your content is good and in demand.

Sure free is part of the equation...

But when it comes to mediums like video... it appears that even the largest players have not yet figured out a way to truly make it pay the bills...

Viva premium content!

And viva free content as a way of leading people into finding it and causing them to want more!

#death #free

seobro 15 years ago

I agree. Back in the 90's my company was paying $35,000/month for bandwidth for one forum site that was super max pop. However, the money we made selling advertising on the site did not even pay for bandwidth so we almost went under.

Actually, bandwidth cost are dropping, but I see a lot of DIGG effect where a spike in traffic will crush a site that is hosted. The trick is to use short snippets of video, or let Youtube host it for you. However, I see this honeymoon coming to an end soon.
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David Hooper 15 years ago

You guys should read "Free - Future of a Radical Price" as it shows how all this works.
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- Martin Luxton 15 years ago
  
  Originally Posted by David Hooper
  
  You guys should read "Free - Future of a Radical Price" as it shows how all this works.
  
  David,
  
  Interesting that, when I googled this, the second result was a torrent site.
  
  People will pay for things if that is the only legal way to access it. The question is, how many people?
  
  Even in your niche, music, there are recent reports saying that the number of people paying for digital downloads is rising.
  
  If Google said, "sorry guys, all the crap videos are free but the good stuff you have to pay for", what have they got to lose?
  
  Or what if they just charged people money to upload their videos?
  
  They'd make 10 billion dollars straight away from internet marketers.
  
  Martin
  
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- Josh Anderson 15 years ago
  
  Originally Posted by David Hooper
  
  You guys should read "Free - Future of a Radical Price" as it shows how all this works.
  
  Free vs. Not Free | Business & E-Business | bMighty.com
  
  Steve Ballmer Declares 'Free Is Not A Business Model' -- Apparently Unfamiliar With Microsoft's Free Products | Techdirt
  
  Both of those short articles have good insight... the first essentially reveals the primary tactic for self funded premium businesses to prosper. The second speaks to how a successful blend of free and premium products and services can be leveraged.
  
  The companies that use free as a business model and who have no premium angle to support it take a gamble with their investors money.
  
  Free as part of a business model works... but what about the completely free we'll pay for you to use it model of site like hulu and youtube? Obviously someone is paying for that bandwidth and if a company without serious cash flow had purchased Youtube what would they look like today?
  
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J Bold 15 years ago

Good for them but I would not pay for hulu content. I guess that means people will just go back to watching shows on nbc.com and abc.com, etc. Or those networks sites will start charging as well. But since they are free to air channels that would be hard to do for them, and that's all I really use Hulu for anyway.
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seasoned 15 years ago

Well, there are THREE reasons for free->pay, as I see it....

1. They were STUPID, and believed others were DUMBER! Oh, I could rattle off the names of companies that did this like FOREVER! Many ADVERTISED on TV, and MOST failed! OTHERS got lucky and were bought out by something like google.
2. They were generous, but ended up being PUSHED, and peripheral stuff made it fail. I did similar things.
3. They had NO real product, or way to advertise, and had to give it away for free, or even LESS!, to build it up so they could charge. Even PAYPAL paid for initial customers!

Steve
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freudianslip27

15 years ago

Wow, that takes me back. I remember when paypal paid for initial customers, as I was one of them. I don't think they'll need to do that again!

They'll make this work somehow, as it is the future. People are gonna get content online, whether it is legally through a website like hulu, or illegally. Having content for free that's ad driven rides on the same principles as publicly broadcasted tv (which of course doesn't have the bandwidth problem)

Matt

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David McAnulty

15 years ago

As long as there are companies willing to pay for the advertising and venture capitalist willing to front the money this model will live long and the companies that utilize it will remain.

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David

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seasoned

15 years ago

Originally Posted by David McAnulty

As long as there are companies willing to pay for the advertising and venture capitalist willing to front the money this model will live long and the companies that utilize it will remain.

Venture capitalists usually DON'T "pay". they INVEST! So the money they give you should NOT be considered INCOME, unless it is from an IPO of STOCK. IPOs are based on potential, and can only be done to a certain degree.

And the people advertising advertise to MAKE MONEY! They will NOT pay more than they expect to see from it for very long.

Steve

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GarrieWilson

15 years ago

I'd pay a per watch fee at hulu if it was under $2 for episodes that I miss because of weather, power or when something runs over and my DVR messed up. But not a monthly fee.

Garrie

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David McAnulty

15 years ago

Originally Posted by GarrieWilson

I'd pay a per watch fee at hulu if it was under $2 for episodes that I miss because of weather, power or when something runs over and my DVR messed up. But not a monthly fee.

Garrie

Maybe you personally would not pay, but think of this.

Would you have said the same thing if someone said you would have to $40/ month to view random tv shows at, random times, and nothing at least half the time would you say Oh Hell Ya Sign Me Up. I would venture to say NO!!

Funny Questions I have though. Why do millions and millions have cable or satellite tv?

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David

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seasoned

15 years ago

Originally Posted by David McAnulty

Well, Cable and satellite are effectively FREE for most people! When you take into account movies, etc... things that may take over a YEAR to see somewhere like hulu. AND there is special and instant programming. Comparing HULU to cable/satellite is no more legitimate than comparing aired broadcasts.

Steve

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Freeman77 15 years ago

I'd be happy to pay for Hulu and get no advertisements. I don't have cable or regular television, so Hulu is my only form of tv-watching.
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shaddai 15 years ago

Why do millions and millions have cable or satellite tv?

A. Variety-many more channels than analog
B. Quality-much better looking than analog

I don't think cable & sat TV are gonna last though...AppleTV, Netflix on the Xbox, Silverlight, video podcasts...the net is catching up & appears to have surpassed the capabilities of even satellite TV. Not only can you get satellite/cable quality (or better with HD) video off the net, you can now choose what you want to watch, when you want to watch it...seriously dirt cheap.

It seems the old-school business models that ABC, CBS, and NBC were built on are dying quickly and seriously need to change for them to survive. The consumer is in 100% control on the net. Retail has learned it, advertising has learned it, the music industry is learning it, and lately broadcast TV.

As bandwidth drops in cost, it seems to me they won't stand a chance when independent media creators get organized & start producing network quality results....on 1/10th the budget.

Todd
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madison_avenue 15 years ago

That's why small scale membership sites with even with 200-300 members are a model we should be looking at. As long as the quality is there people will always pay for specialist knowledge.
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Profit-smart

15 years ago

I forget where, and I may be wrong; But if I remember correctly a advertisement on hulu costs more than on cable/sattelite networks.

If thats true, I would think Hulu has little motive to do this other than a minor increase in profit margins.

Think about it, they pay for what?

Hosting, Bandwith, maybe 50 employees?

I dont know about the license fees though.

But otherwise, there not spending anywhere near the same kind of money as traditional tv networks and providers.

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seasoned

15 years ago

Originally Posted by Profit-smart

There are FOUR ways to get advertising on cable or sattellite. Only the last two are really "CHEAP", to the best of my knowledge..... The reason why they are so expensive... I heard #4 once cost an average of $20(TWENTY DOLLARS), and #3 probably costs into the hundreds, or even thousands.(I never checked). The REASON why they are SO expensive is that they are VERY REGIONAL! To cover a state, you will see it could EASILY cost far more.

#2 is channel wide, and generally costs FAR more.
Of course, you ALL know #1! That is over channels that are more traditionally watched. #1 and #2 are also based on viewers! #3 probably is ALSO. So it will cost less to advertise on get smart then it would on the superbowl.

HULU would have to pay a LOT for hosting and bandwidth. And YEAH, licensing can be a LOT. Places like "tv land" probably exist because the licensing fees are LOWER, and they know there is still life in the shows.

Steve

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Kenster 15 years ago

I would rather see more advertisements than a pay per watch fee. If they do that, I will then watch episodes on youtube at a lesser quality but free just out of principle.

Man, and I loved hulu!
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The death of free hulu?

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