Studios must choose between providing content for less or prepare for death
Jul 29, 2011
Studios face a dilemma: provide cheaper content or face decline in the digital age.
Among the many drastic changes that the content market is undergoing due to the rapid digitization of the planet, there is a battle for content, contracts, licenses, authorizations, fees, release windows, exclusivities, and other complexities that involve the production of video content. If the establishment of content production was taking a few steps forward in understanding the problem (where Hulu presented itself as a good option in the industry), it has already stopped progressing and will probably regress.
The announcement from Fox (a company of News Corporation, which, coincidentally, is not going through its best days) stated that the company will remove from Hulu's offerings the content available to non-subscribers of its cable or satellite service. Michael Weinberg, from Public Knowledge, noted that Hulu's idea of offering content with a launch delay compared to TV subscribers suggested that the television industry had learned something from music piracy. Weinberg states the obvious: most consumers will prefer to pay a low fee for content if it means convenience, rather than getting it for free on the Internet. The growth of Hulu, which multiplied the quantity of content providers by 125 and advertisers by 50 in a few months, attested to how the service had filled the gap opened by demand. From there, content producers have been playing a squeeze game with users that culminated with Fox's decision.
Fox, in fact, at least maintains coherence. After spectacularly mismanaging the purchase of MySpace, paying about US$600 million to sell it after three years for 5% of the value, it continues to miss the mark in digital culture. Its decision to withdraw content from Hulu has already been celebrated as the "launch of the 2011 online piracy season". Hulu, as Weinberg rightly observes, had already disproved a verdict from Slate that said the easiest way to get content on the network is by downloading it illegally. Slate is wrong (in fact, it is wrong quite often). Hulu, even in its infancy, showed that piracy is a market problem. At a fair price, the user pays for comfort, even if they have to wait for a window in relation to TV.
The shortsightedness of NewsCorp, famous on the other side of the Atlantic, since the Murdochs, Rebekah Brooks, and the editors of News of The World never saw anything that happened in the newsroom, is dictating Fox's positioning. Little will be lost. Fox is no longer a creatively important studio (even series like the brilliant House are not the work of Fox's marrow, but of producers like BadHat Harry) and today it is a fat bourgeois who calls the shots from brute force, not with the subtlety of a strategist who plans for the future. After demonstrating a digital feeling with MySpace, the Murdochs are going all in on Hulu. It's like the legend of the Decca Records director who, after rejecting newcomers David Bowie and Marc Bolan, already with the weight of having rejected a band from Liverpool called The Beatles, said: "Get these hairy guys out of my sight and bring me substitutes for The Beatles". It's pure business talent!