Hulu is Likely Hurting More Than Helping
Lately, I’ve been “hooked” on the television show Fringe. I don’t typically get into shows much, but this one is well written, has decent effects, and I’ve been surprised by the no holds barred science fiction in prime time vibe.
I started watching Fringe a bit into the second season and it occurred to me today that I haven’t seen the first season at all. I went on iTunes to check out how much the first season download costs and immediately decided against it. I simply balked at the $39.99 and $59.99 price points for standard and high definition downloads.
It’s not that I believe those are horrible prices per se, but that I’ve been used to getting content for a much lower price. We pay for Netflix and Hulu Plus; we don’t have cable or broadcast TV. Our bill for both services is under $25 per month. While we could afford it, I have a hard time justifying $60.00 for something I’ll only watch a couple of times.
This is a very bad thing for content providers. The market price of their content is getting closer and closer to zero and, perhaps even worse, people who could pay more are getting conditioned to paying less for consuming content. Pricing is all about setting expectations, and it’s very hard to change them once they are set.
You could argue that Hulu, even Hulu Plus, is partially add supported and that allows networks to continue to get paid, but adds are becoming a less and less effective way to pay the bills. Most networks rely on syndication and sales of physical media to help make ends meet. However, physical media like DVD and Bluray are rapidly being replaced with streaming services and syndication’s sole purpose, offering more options for watching a back catalog, becomes unnecessary if an entire back catalog is available for streaming online.
We’re not far off from being able to access just about anything we want to online for little to no cost. It’s where the momentum is. However, this is likely bad for the industry as a whole. If the streaming services had been structured more like a cable offering (perhaps ala carte) and opened their content up for distribution on every platform from the get-go, things might have been different. As of now, I see content providers demanding more and more from their high paying customers (those subscribing to cable or satellite television) increasing the likelihood that people will simply cut the cord as their cable bills, and the number of viable low-cost alternatives, climb.