The mainstream media has been abuzz this week with word that Hulu is exploring authenticated “TV Everywhere” deals with pay-TV operators — apparently unaware that Fox, one of Hulu’s owners, started doing this with its first-run primetime shows last summer.
In July 2011, Fox announced it would begin withholding new episodes of popular shows like House, Glee and The Simpsons for eight days from the free-to-all sections of Hulu.com and Fox.com.
See the little tiny locks on the Fox website for full episodes?
Currently, those episodes are available day-after-air only to Hulu Plus subscribers and customers of participating pay-TV providers. Dish was the first in Fox’s TV Everywhere roster, and Verizon FiOS has joined as well (see Fox Urges Pay-TV Subs To Agitate For ‘TV Everywhere’ Access and Fox To Stash New Online Episodes Behind Walled Garden).
News Corp. chief digital officer Jon Miller, speaking at CES in January, stressed the importance of the TV Everywhere model for both Fox and Hulu, B&C’s George Winslow reported.
Indeed, News Corp. decided to retain its stake in Hulu precisely because the Internet TV site is adopting a TV Everywhere strategy, according to Miller: “So you now have an authenticated version where you get more programs sooner if you are an authenticated subscriber. If not, you have to wait and you may not have the full season” free on Hulu.
Why is Fox doing this? So that when the time comes for it to negotiate retrans fees with pay-TV operators, it has another carrot to offer them — in addition to the stick of pulling it signal. (It also helps answer this question from the MVPDs: Why should I pay you guys anything if you’re giving all your best stuff away for free online?)
Meanwhile, Hulu itself has also signaled its intent to strike TV Everywhere arrangements. On Feb. 29, it filed an opposition to Dish’s attempt to trademark “TV Everywhere” because its business would be “damaged by such registration” (see Hulu Wants to Stop Dish’s ‘TV Everywhere’ Grab, Too).
But evidently, the prospect of Hulu — the most popular website for professional TV content, with more than 1 billion videos streamed in March — erecting a bigger pay wall in the form of TV Everywhere was news to many people.
And it spurred a new round of hand-wringing among the cord-cutter set. “Hulu to pull the plug on cable-cutting consumers?” wondered Digital Trends. “No More Hulu For You,” lamented Free Press’s Josh Levy.
But first, it’s unlikely Hulu would shut down the free-for-all party altogether. Besides angering technology bloggers and its millions of fans, if Hulu eliminated free-to-consumer content it would puncture its ad sales — which accounted for the vast majority of its $420 million in revenue last year. Nothing to sneeze at.
The more probable scenario: Hulu would make the newest shows and additional content available, across multiple devices, to TV Everywhere pay-TV affiliates. It already has a template for premium access of this kind with Hulu Plus, which counts about 2 million subscribers who pay $8 per month for the service.
The free stuff on Hulu will be older, and there will be less of it for non-subscribers, as Miller suggested.
And what’s wrong with that?
Plenty, according to the we-don’t-want-to-pay-for-TV crowd. “These guys are trying to put the Internet genie back in the bottle and return us to a time when they controlled television,” Levy complains.
Well, here’s a news flash: They still control TV. Hulu’s owners — NBCU, News Corp. and Disney — realize that, like their cable network brethren, extending the pay-TV subscription model to the Internet and mobile devices is a key part of maintaining an economic model that can fund high-value broadcast TV content. When you have an entirely ad-supported video content model, you get YouTube — which has value, to be sure, but is certainly not a position Hulu or its owners want to find themselves in.
Consumer advocates hate TV Everywhere because it limits choices. It’s coercive, they say: You have to buy a cable, satellite or telco TV package, even if all you want to do is to watch HBO’s Game of Thrones on your iPad.
But programmers see it differently. To them, TV Everywhere unlocks content that would otherwise be totally unavailable on digital platforms (well, except through pirate websites). And, while industry execs acknowledge the danger of rising programming costs, they argue that the cable TV bundle is still a great entertainment value — which is further enhanced with TV Everywhere.
As Turner’s Coleman Breland says: “I’ve never looked at TV Everywhere as controlling content. It’s about liberating content.” (See my Q&A with him in this week’s issue of Multichannel News, as well as a roundtable discussion on TV Everywhere with top executives from Comcast, Discovery, MTVN, HBO and Dish.)
What do you think? Add your comments below.
Programming Note: TV Everywhere and more will be on the agenda for TV In a Multi-Platform World, Thursday, May 3 in New York City, presented by Multichannel News, B&C and TV Technology. Scheduled speakers include HBO’s Eric Kessler, ESPN’s Matt Murphy, Comcast’s Charlie Herrin, USA’s Jesse Redniss, Google’s Aaron McNally and many more. Click here for more info: www.multichannel.com/multiplatformevent.