The Trouble With Hulu... Too Many Competing Interests

from the gonna-kill-it dept

Nearly a year ago, we questioned whether or not Hulu could survive. It's not that we don't think the product is well done or well liked. Other than the annoying regional restrictions which pisses off lots of people, the overall service is quite nice. The problem is that there are just way too many conflicts to deal with. The company is owned, in large part, by the networks, and that's leading to all sorts of pressure and complaints about how ads are sold and whether or not there should be a subscription service. From what I've heard, the folks at Hulu understand quite well how an internet-age company should act. The company's rather honest explanation for its fight with Boxee certainly suggested the problem was at a different level than with Hulu management. But... with Hulu having most of its ownership from legacy industries, combined with having so many different players involved in the ownership, it shouldn't come as a surprise at all that the company is now coming under pressure to do things (subscriptions, limits, etc.) that will certainly kill off whatever good has been done. And, since some of the pressure is actually coming from the cable guys as well (who view Hulu as a huge threat), this will only get worse if, as is widely expected, Comcast completes its purchase of NBC Universal.

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Comcast And Time Warner Team Up To Control What TV You Watch Online

from the consumers-anyone? dept

There's certainly been plenty of talk lately about how efforts like Hulu to move television shows online could undermine the television industry as people start to realize that they don't need to pay gobs of money to a monopoly cable provider (other than maybe for broadband). The TV content folks believe this is a problem as well, because the cable companies currently pay them corporate-sized gobs of money for the rights to offer their channels to end customers. This leads to regular fights between cable companies and content providers -- but neither really want to see that old system go away. The cable companies want end users to keep paying monopoly-inflated gobs of money, and the content creators want that hefty check from the cable companies.

So, it was no surprise back in February to hear of plans to make agreements between cable companies and content providers that would limit what kind of video you could watch online, requiring you to be a cable company subscriber and "authenticating" what you could watch. Thus, it should be no surprise that Comcast and Time Warner are now announcing exactly that.

This should raise all sorts of antitrust concerns. First, you've got industry execs working together to limit consumer choice, and these industry execs already have quasi-monopolies in certain regions. And they're doing this to keep prices high against competition from the internet. Doesn't that seem like a problem?

The real issue, of course, is that the equation is (as it so often is with such companies) backwards. Rather than embracing what the internet allows these companies to do, they're trying to remove that ability, and make it act like good old television, with those good old revenue streams -- and, amusingly, claim it's "the future of television." Not even close. It's television's past, with an attempt to move it to the internet without any real advantages. As Om Malik points out in the link above: "The deal makes it painfully obvious that everything cable companies do... is done to save their video franchises." It's not about looking forward. It's about preserving the past.

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Bell Canada Shuts Down Crappy Video Store That No One Used... But It's Still Throttling

from the well-look-at-that dept

Just about a year ago, we pointed out that Bell Canada was facing scrutiny for its decision to force traffic shaping on all of its resellers, often without letting them know... and yet, at nearly the same time, it launched its own crappy online video store. The whole thing seemed odd. First, Bell claimed it needed to shape traffic to deal with congestion... but then it had no problem launching its own video store that would have no traffic shaping. That certainly seems like anticompetitive behavior. Yet, as we pointed out at the time, it was difficult to believe that the Bell online video store would get any usage at all. It had an extremely limited selection, high prices and buggy Microsoft DRM. What a bargain?

Apparently, it took all of a year for Bell Canada to realize that it wasn't getting any use whatsoever, and Joe McEnaney points out that Bell Canada has quietly shut down the site... though, it's still throttling traffic from resellers. Maybe, next time, instead of trying to limit competitors and offer something crappy, Bell could spend its resources investing in bandwidth. That would have made everyone a lot happier.

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NBC's Zucker Still Seems Like He's Feeling Around In The Dark

from the still-getting-used-to-this-whole-internet-thing dept

It's hard to know where to start with this story on an interview with NBC head honcho Jeff Zucker from the D conference this week. He makes a few comments about replacing "analog dollars with digital pennies", saying he thinks they're now up to dimes, but his comments overall still don't create much of an impression that he understands the fundamental changes needed to his company's business any better today than he did a couple years back. For instance, he talks about the high cost of producing network TV, and how it's made it impossible to "sustain just average programming." Is that such a bad thing? Perhaps too much "just average programming" has led NBC to its current #3 spot among TV networks. To this point, he says that a show like Seinfeld, which didn't perform all that well in its initial four episodes, wouldn't survive today. But whose fault is that? It's hard to see how it's anybody but the networks'. If they can't do a better job of determining which shows will be hits, or crafting popular shows, that certainly seems to be their own problem. Taken in whole, the comments largely seem to smack of the same old "the world is changing... which means there's a problem with the world, not with our business" thinking that dominates old media. While NBC's Hulu is an early success, it doesn't mean the company fully grasps the change needed. For instance, if finding new hits is such a problem, why not leverage the online presence to test and build new shows? Or here's a novel thought: Hulu's a popular site, so why not test shows there before putting them on the broadcast network?

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Are Free Bandwidth And Distribution Bad? Ask Susan Boyle

from the oh,-they're-not-getting-paid? dept

Five years ago, if there was a show called Britain's Got Talent (it only showed up two years ago), and it had a sensation like Susan Boyle, it would have had a hard time putting it online. It could have signed up with an expensive hosting service to stream the video, but also would have needed to make a choice about what technology to use (RealMedia? Quicktime?), which would have made it difficult for many people to actually watch it. The bandwidth costs of having people download or stream the video would have been quite high as well. Chances are, they wouldn't have bothered. It just would be way too expensive, with too little a response. Yet, now, thanks to YouTube, they can do it entirely for free. That's amazing. Susan Boyle is an international sensation thanks to YouTube. Without YouTube, she would have been a local UK sensation at best.

But, you have folks at the NY Times who seem to think that it's a bad thing, because the producers of the TV show aren't making any advertising revenue from the clip being on YouTube. No, but they've created a huge singing sensation that is getting attention from millions of people. If they can't figure out how to make money off of that in the long run, they don't deserve to be in business. However, it still amazes me that anyone thinks that because a video is up on YouTube but not making money, it's somehow a bad thing. The producers of the show are getting free technology, a free community of watchers, free bandwidth and free promotions that wouldn't have been possible just a few years ago. And this isn't enough?

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NBC Universal's Great Idea: Let's Make It Harder And More Expensive To Watch The Olympics

from the this-is-a-joke,-right? dept

During the last Olympics, we sat stunned as NBC Universal made mistake after mistake after mistake in making it incredibly difficult for fans who wanted to watch the Olympics online to do so. And then, NBC Universal executives bragged about how difficult they made it to watch, when really they just shot themselves in the foot, since even the audience who could actually watch it online watched it more on TV. In other words, everything about NBC Universal's strategy backfired... and then they talked about how great it worked. It's hard to understand how the folks involved still have jobs.

But... rather than learn from that, it looks like NBC Universal has decided to make things even worse for the next Olympics. NewTeeVee points us to the news that NBC Universal is working on a deal that will require online viewers to first prove they have a pay TV package before granting them the ability to watch buggy, limited, delayed online video of the event. Oh, and of course, this will only apply to the cable or satellite providers who first pay NBC Universal for the privilege. How a viewer will "prove" he or she is a customer is still being decided, but will likely involve an IP address if you're at home, or some other convoluted system if you're elsewhere.

This really is just an extension of the ongoing discussions between the networks and cable/satellite TV providers to lock up their content behind a paywall before online video wipes away the need for pay TV. It's like watching a trainwreck way in advance. Any attempt to limit what can be done for the sake of keeping an old business model in place has always failed miserably. It's always disappointing to see people who should know better make the same mistake over and over and over again.

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Is It Impossible For Hulu To Survive?

from the too-many-competing-interests dept

We've pointed out in the past that you don't compete against piracy by being lame, and you have to give Hulu at least some kudus for doing its best early on not to be lame (despite plenty of expectations to the contrary). However, every time we've mentioned Hulu around here, we've noticed an awful lot of pissed off comments from users, who complain about too many advertisements or the ridiculous location restrictions (or music restrictions) that Hulu has to put on content at the request of content owners. And, now, with the removal of Hulu content from Boxee, some are beginning to question whether or not Hulu is driving people back to unauthorized options for TV content.

The real question, however, may be whether or not it was ever possible for Hulu to really succeed. This isn't to knock the team at Hulu, who have actually gone beyond most expectations in delivering what they could, with a definite focus on usability and making the service as reasonable and useful as possible. But, with so many competing interests tugging them in every direction, it's nearly impossible for the company to actually satisfy the content providers and viewers at the same time. We've seen it over and over again -- with content providers having totally unrealistic expectations of what sort of limitations need to be placed on their content -- not realizing that whether they like it or not, there are other options out there. Hulu did a pretty good job "competing" with those free options, but as content providers get more and more assertive with their demands for limitations, it seems likely that the company is going to find it more and more difficult to compete against better, more engaging and less annoying (if illegal) competing sites. You don't compete against free by being lame. Hulu seems to recognize that -- but Hulu's content providers still haven't gotten the message.

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Italian Judge Declines To Dismiss Lawsuit Charging Google Execs As Criminals For YouTube Video

from the bad-law dept

The judge in Italy hearing the ridiculous case charging Google executives with criminal charges (which could lead to jail time) because of a video uploaded to YouTube, has declined to dismiss the case, and will allow it to proceed. The lawsuit is ridiculous on many levels, and it's difficult to see any common sense explanation for why it should be allowed to proceed.

The case involves a video of some kids taunting a boy with Down syndrome, which was uploaded to YouTube. The very fact that it was uploaded to YouTube actually allowed the kids in question to get caught and punished appropriately for their actions. In other words, by any reasonable thought process, the video helped bring these kids to justice. YouTube and Google should be thanked. Instead, Italian authorities are trying to put five of their execs in jail for this. Those execs had nothing to do with the making of the video. They had nothing to do with the uploading of the video. Most of the execs being charged aren't even in Italy. They had nothing at all to do with any of this. Not only that, but Google appears to have acted quite admirably in this situation. Once they were alerted to the video, they had it pulled down off the site within hours.

But, one of the lawyers working on the case against Google states: "The outcome of this will be to determine how big companies like Google should be expected to act." What's unclear is how Google could have acted in any more reasonable a manner than what it did. The reality may be that the outcome of the case will determine whether any service provider will allow their services to be used in Italy. After seeing this case, I would imagine that many online service providers are now considering blocking access to all Italian ISPs. The liability (possible jail time?!?) is way too high for simply allowing people in Italy to use your service.

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Online Video Sites Harming Themselves With Geographic Restrictions

from the the-internet,-it's-global dept

Techdirt reader Santiago Crespo recently wrote in making a really valid point about all the various authorized online video sites that seem to employ geographic restriction, much to their own detriment:

I live in Argentina, in South America and am an avid Heroes and House follower, but there's a problem watching those shows in our side of the world. Big network subsidiaries offer cable access to American TV shows, but for some unknown reason they can take up to six months to subtitle them in Spanish, and therefore we're stuck watching last season episodes all the time. I don't need subtitles to watch the series, since my grasp of the English language is decent enough to understand what the show is about.

But every time you want to use any legal video site such as Hulu, the NBC website, Sling.com or even some bits of YouTube (Geo-restricted music videos), it will show an error message saying you're "geographically challenged." So instead of geolocalizing ads (as Google does, since I get ads for Deremate.com, a Latin American eBay clone here on Techdirt) they leave me no choice but to head over to the pirate bay to get my fix ad-free.

And even if your comprehension of English isn't good enough to watch the shows downloaded from Bittorrent, every single TV episode gets fansubbed within 24 hours of airing. I think the big networks are wasting a revenue opportunity by limiting who can watch their shows (6 months from now if you have cable) instead of letting you watch them on-line (unlimited audience potential) with some geo-located ads.

It's a really good point. Some of it may be due to rather old school and silly geographic "rights" issues, where certain contracts allow companies to only have the right to broadcast content in certain geographies so that the content owner can try to resell the same content in other areas as well. Yet, by now it should be clear that geographic specific content makes less and less sense, and really is detrimental to the content owners. Rather than making it easier to score big deals, all they're doing is encouraging piracy.

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Italy Wants To Put Google Execs In Jail Over Uploaded Video

from the punish-whoever dept

Sometimes you hear about lawsuits that are so bizarre and so wrongheaded, you just have to shake your head and wonder what people are thinking. For example, take this news that Italian prosecutors are preparing to file criminal charges against four Google execs. Why? Not for anything Google, as a company, did. Or anything those executives actually did. But, because four kids filmed themselves taunting a disabled boy in a classroom and that film was uploaded to Google. The four kids in question are also facing criminal charges -- which is perfectly reasonable.

But under what distorted sense of justice does one somehow have to have to think that Google executives also deserve criminal charges over this event?

The fact that the video was uploaded to Google gave the prosecutors the evidence necessary to go after the kids in question. Google, itself, had no proactive role in uploading the video. Neither Google, nor the executives in question, had anything to do with the video whatsoever. In fact, Google took the video down within hours of being alerted to it. It serves no viable purpose under any justice system whatsoever to charge Google executives for the content in the video. The report notes that the kids in the video hit the disabled boy with a pack of tissues as well. I would think that the tissue company has just as much, if not more, responsibility for the video than Google. Will we soon see charges against its execs as well?

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Putting Metadata In Video For Search Purposes? Patented! Microsoft Sued

from the it-never-ends dept

The last time we wrote about a small company called Gotuit Media, it was in 2003, when the company was suing TiVo for an excessively broad patent about recording TV while playing back TV concurrently. Apparently, the company is still in the business of suing other companies that are putting obvious ideas into practice. For example, it's now suing Microsoft over its implementation of Silverlight-based videos for the Olympics on NBC's website. Microsoft's crime? Apparently the videos are going to include some metadata that will make them searchable, allowing users to search and find specific content. And, that, according to Gotuit, is patent infringement.

Of course, that's ridiculous. If you were to tackle the problem of how to create a search engine for video, one of the first things just about any competent programmer would think of is adding text metadata to the video that would then be used for search. But, thanks to the patent system, apparently you can only do that if you've agreed to pay Gotuit a licensing fee.

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And You Thought The Next Generation Video Standards Battle Was Over?

from the we've-got-a-new-one-coming-on dept

If you thought the questions about what technology standard we'd be using to watch movies was settled when Blu-ray won the next generation DVD standards battle, then you're in for a bit of a surprise. In taking nearly half a decade to decide which standard would make it, the DVD camps left open plenty of opportunity for online competitors to start making their moves. The technology for delivering movies online has been rapidly improving. But, of course, what we didn't count on was that it would just create a huge new mess.

Earlier this week, there was all sorts of talk about Netflix streaming movies to the Xbox as part of Netflix's effort to get consumer electronics companies to build in support for Netflix streaming. As we warned when that announcement was made, it's a bad idea for Netflix to focus on a proprietary streaming solution, as it's only going to set up another standards battle. And, indeed, Blockbuster is working on its own such solution. Then, of course, everyone knows that Apple's in the market with the AppleTV. And don't forget Sony, which is selling a special (extra expensive) TV for downloading movies. And, of course, there are countless startups in the market as well.

Oh, and how could we forget Amazon? The company is now announcing its own proprietary online store for streaming movies and TV. This one piggybacks a bit on Sony's awful plan (meaning if you buy that super expensive internet-connected TV, you'll also be able to stream movies from Amazon).

But the end result is a total mess for the entire market, and that doesn't help anyone. All of the players should take a look at how badly the multi-year DVD standards battle hurt the industry. It makes people unwilling to buy certain hardware, as they don't want to be stuck with the "loser" a year from now. What's wrong with coming up with a single standard for streaming movies from any particular service to various TV-connected devices and computers? Then let the different providers compete on actual services provided? That would increase adoption, and let these companies do what they do best, rather than fighting a can't-win battle against too many other competitors.

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Google Admits It Still Hasn't Figured Out How To Make Money From YouTube

from the keep-trying dept

When Google shelled out $1.65 billion for YouTube two years ago, you had to figure that the company had some plans on how to make money with the site. Apparently not. Google is admitting that it's still not quite sure how to make money with the property, though folks seem sure there must be some way. Still, from this discussion it appears that the massively hyped video overlay ads haven't really lived up to expectations.

To be honest, it still seems like the wrong thing to do to figure out how to stick ads on YouTube -- because no such ad is going to get very much attention. People come to YouTube to watch the videos they want to watch, not to be annoyed by an irrelevant ad. Instead, the real focus should be on the fact that YouTube videos themselves are advertising -- the question is just: for what?

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All The YouTube MeToos Combined May Not Be Worth $1.65B

from the the-best-laid-plans... dept

As YouTube got super popular and eventually sold to Google for $1.65 billion, a bunch of other startups tried to hop on the bandwagon and become the "next YouTube" in order to cash out as well. In fact, some of them had actually been around since before YouTube, but morphed to make themselves more and more like YouTube, so that there basically are a large number of clones out there that don't offer very much in the way of differentiated functionality. Of course, through all of this, YouTube has continued to thrive and grow, meaning that these MeToo(b)s haven't found enough interest to really get very far. Some have a lot of traffic, but hosting all that video is expensive (as YouTube was all too painfully aware, as it needed to borrow $15 million just to pay the bills before the Google deal closed). So, now with so many MeToo players out there, and no one looking to swoop down and pay $1.65 billion for their traffic and indistinguishable technology, many are expecting something of a shake-out, as there are way too many players in the space, they're losing a ton of money, and none of them have done much to stand out or build something that others want to buy. Plus, with YouTube opening up its APIs it may be even more difficult for these clones to stay afloat.

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French Court Tells Google To Do The Impossible: Stop People From Uploading Copyrighted Material

from the and-if-it-can't? dept

What do you do when the court orders you to do the impossible? The French High Court has apparently told Google that if someone alerts it to an unauthorized video being uploaded to Google video, not only does it need to take the video down, but it must prevent that same video from ever being uploaded again ever. It seems that some people still believe that this really is possible, but despite some companies claiming they offer filters that will block certain uploads, none have been shown to be all that effective. There's always some way to mask or change the content enough that these filters won't work. The question that comes up again, though, is why is this Google's responsibility? If there's liability, it should be on the person uploading the unauthorized content. If someone is clever enough to get around any filter, then why should Google have to pay for that?

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CBS More Focused On Keeping Fans Happy

from the keep-the-fans-happy,-and-business-models-work-out dept

It's fascinating to watch the different approaches that competitors NBC and CBS are taking to dealing with the online video market. NBC has seemed almost to have a new strategy every day, happily putting videos up on YouTube, pulling them down from YouTube, being happy with YouTube, being upset with YouTube, putting videos on iTunes, pulling them down from iTunes. It's as if NBC doesn't have a real strategy at all -- or, at the very least, different factions within the company "win" every few weeks or so. In contrast, you have CBS, who recognized the importance of online video at nearly the same time as NBC. However, rather than going with a constantly shifting target, CBS's strategy has evolved in a pretty straight line. The company quickly realized that distribution and awareness was a lot more important than protection and focused on getting videos available wherever people wanted to view them (not just where CBS could control everything). That meant syndicating the content as widely as possible and even embracing the benefits from people sharing CBS content on YouTube and other sites. That's why it's not too surprising to hear CBS' Les Moonves respond to questions about NBC's decision to take its content off iTunes by saying that CBS is thrilled with iTunes and sees no reason to follow NBC's decision. The really telling statement is this one: "We look at iTunes as much as a promotional vehicle for our shows as a financial vehicle." That's why NBC is focused on putting up barriers for viewers, while CBS appears to be focused on taking them down.

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Will Google Face Patent Battle Over YouTube's New Ad Format?

from the pssst,-Google,-buy-us...-sincerely,-VideoEgg dept

Google and YouTube got a ton of press coverage for releasing their new video ad overlay program on Tuesday evening. However, despite some amount of fawning from some tech publications, many people noted that the ads were remarkably similar to the format the startup VideoEgg launched nearly a year ago. The folks over at VideoEgg are trying to figure out what to do in response -- which apparently includes potentially filing a patent lawsuit against Google. VideoEgg has apparently applied for patents on just such an advertising system -- though the patents haven't been granted yet, so there's not much VideoEgg can do on that front for the time being. Of course, you could argue that what they're doing isn't all that different than ads that have been on TV for years... but we'll let the patent office sort that out. So far, however, VideoEgg seems to have figured out the best strategy: using this to get much more attention for itself. It's been making sure that people know it had the idea first, and (as of right now) changed its website to say in HUGE letters "Welcome, YouTube. Seriously." Then it notes that it's nice to see the rest of the market catch up. Hopefully this won't descend into a patent battle -- as VideoEgg is right. It is nice to see the rest of the market catch up, and hopefully this will drive many of the players in the market (including VideoEgg) to improve upon the offering even further. That's what competition is all about. Update: In the meantime, it looks like plenty of others are out there claiming that they came up with the idea first, once again showing how many different "inventions" are really just the next obvious step, as so many different parties come up with the same thing at once. Hopefully, that's evidence enough to deny a patent.

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Are Video Ad Overlays The AdWords Of YouTube?

from the something-different... dept

Many people have been wondering how Google would better monetize YouTube -- as there was a lot of concern that pre-roll or post-roll advertising wasn't particularly effective. The company, instead, has announced an "overlay" offering, where certain videos will contain a small, semi-transparent overlay across the bottom of the screen, similar to what you'll often see during TV shows. The ads show up 15 seconds into the videos they're on and only last for 10 seconds. Viewers can click to close the ads, or they can click on them, at which point they stop the video in the background and open up a "player within the player" that can include more advertising content. After the viewer is done with the ad, they can close it, and the original video picks up where it left off.

Most of the press reports say that the ad is a video within a video, but the one ad I saw was a lot more interactive. The ads are only showing up on the videos of YouTube's "media partners" and the revenue from the ads gets split between the media partner and Google. While plenty of people will talk about how innovative this is on Google's part, others, like VideoEgg have been offering something similar for quite some time. However, obviously, Google can help make it the standard type of video ad out there. Expect to see many others shift to this model pretty quickly. Of course, Google is hyping up how much higher the clickthroughs are on these types of ads -- but it's tough to tell if that will last. You can expect higher clickthroughs initially simply because it's different and viewers aren't used to seeing it. But, over time, ad blindness is likely to creep back in.

In the meantime, though, it's nice to see that Google didn't just default to the easy (and most likely ineffective) route of going pre/post-roll. One of the key reasons for the success of Google's AdWords advertising was that it recognized that ads were a lot more effective if they were both relevant and non-intrusive. It's not clear if these new video ads qualify completely on both accounts, but it's better than just assuming you had to force people to sit through something else before they could see the content they want to get to. The other question, however, is how widely this will be spread within YouTube. The other key reason for AdWords' success was that it was incredibly easy for anyone to start advertising quickly and have their ads appear in relevant spots. That might not be true in this case if ads will only show up on "partner" videos. My guess is that they'll have to open the program up to others relatively quickly -- though not force it on people who just want to upload videos for fun.

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