TV networks, get online or get out of the way

hulu plus subscription service is here key art

Since its inception in 2007, Hulu has become one of the most popular places to watch TV on the Internet. But now its owners, including ABC, NBC, and Fox, are Hulu’s worst enemy. Addicted to an aging business model, Hulu’s parents are using and abusing it — and other streaming sites — for their own short-term gains.

The big broadcast networks have:

  • Constantly changed the posting schedules of new shows on Hulu
  • Randomly pulled content from the site without warning
  • Disabled Hulu for Cablevision subscribers (Fox)
  • Blocked Boxee users from browsing Hulu.com
  • Blocked access to Hulu.com via Google TV
  • Refused to work with Apple TV
  • And more…

With cable companies beginning to bleed customers (800,000 in the last two years) and ad sales down, the big broadcast networks are now pushing free online distribution out of the way for something they’re more comfortable with: subscription fees. They’d like cable companies to start paying big bucks to retransmit their broadcast channels, which are free over-the-air for anyone with a digital antenna. In return, cable companies are demanding exclusive rights to network content. It’s a lose-lose for consumers and the future.

Treating Hulu like a puppet

hulu-alec-baldwin-commercialFox is the most aggressive network of the bunch. Since mid-October, Cablevision subscribers have been without Fox due to ongoing negotiations between the cable provider and network. In attempt to push a deal through, Fox forced Hulu to block all Cablevision subscribers from viewing Fox content on the website. (Cablevision serves large portions of New York, New Jersey, Connecticut, and Pennsylvania.)

Any Cablevision Internet customer attempting to watch content on Hulu received the following message: “We notice that you are attempting to access Fox content on Hulu. Unfortunately this content is currently unavailable to Cablevision customers. We look forward to bringing Fox content to Cablevision customers soon.”

After 12 hours, Fox lifted the ban, but the move attracted the attention of several U.S. Representatives. “The tying of cable TV subscription to access to Internet fare freely available to other consumers is a very serious concern,” said Representative Edward J. Markey (D.-Mass.) in a statement on Saturday.

A move like this shows where Fox ranks its online content and customers. To try and strangle Cablevision into paying more for its free broadcast channel, the network cut access to its free online website. This isn’t the first time Hulu has been used as a weapon for the networks.

The Internet is for PCs only!

In 2009, Hulu cut support for Boxee, an Internet TV application, under pressure from its content providers. In a blog post that no longer exists, Hulu’s CEO, Jason Kilar, explained why the company was dropping support.

“Our content providers requested that we turn off access to our content via the Boxee product, and we are respecting their wishes,” said Kilar. “While we stubbornly believe in this brave new world of media convergence — bumps and all — we are also steadfast in our belief that the best way to achieve our ambitious, never-ending mission of making media easier for users is to work hand in hand with content owners. Without their content, none of what Hulu does would be possible, including providing you content via Hulu.com and our many distribution partner websites.”

apple-tv-google-tv

On Friday, history repeated itself. Google launched its new product Google TV, which allows users to browse the Internet on a TV and watch content from video websites like YouTube and Hulu. Immediately proceeding the announcement, ABC, CBS, and NBC announced that their full episodes – -available for free on Hulu.com, NBC.com, CBS.com, and ABC.com — would not be available through a browser on Google TV.

It boils down to economics. Those watching on Google TV would log in and watch ads like any other online viewer. The key difference is that they are using a television instead of a computer. Networks make more from cable fees and broadcast ads than they do for the same content on the Internet. The big networks have supported the Internet as long as it stayed on tiny PC screens. Now they don’t.

Even Steve Jobs is having a tough time with the networks. Only Fox and ABC signed up to be a part of Apple TV, which offers 99-cent rentals for full episodes of popular TV shows. Why so reluctant?

The Internet finds a way

To us, the Internet is one entity that keeps showing up in new places. To big networks, it’s more like an animal they can kill, chop up, and sell in pieces. If you want to view their content on anything but a PC, they want you to buy a subscription app for that; if you want to own TV shows, you’re going to have to pay $30 to $100 a season for the DVDs; if you want to watch shows on a mobile device, they want you to buy an app for that too; if you want to watch their content on a TV, it’s going to cost you a $65 to $150 monthly cable subscription. It’s only free if you’re on an antenna or a PC. And even the content you pay for may disappear at any time (see: Modern Family) or only become available to stream for changing, confusing windows of time so that the networks can maximize their many networks of sales.

Is this is a good long-term strategy? TV viewers are rapidly moving to the Internet. It’s happened so quickly, in large part, because of how open-armed Fox, ABC, NBC, and CBS have been to the medium for the last few years. They helped usher in this new era and now they’re ruining it to protect dying sources of revenue like cable and DVD sales. Is it good business when Hulu is ready to lower its Plus membership price due to lack of perceived benefit by consumers?

If consumers aren’t able to watch their shows legally or consistently through Google TV and other Internet platforms, they will find another way to watch them. Whether it be a subscription to Netflix or BitTorrent pirating, until the networks decide to get on-board and adapt to the Internet, they’re going to find themselves in an ever diminishing position to bargain.

In the words of Dr. Ian Malcolm from Jurassic Park, “life, uh… finds a way.” If you don’t believe me, ask the music industry. Better yet, look at one of their sales charts.

The views expressed here are solely those of the author and do not reflect the beliefs of Digital Trends.

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