Hulu

With Hulu about to officially launch, here are some quick ways to get smart.

First, check out the site when it debuts, probably some time this week.  (If you can't wait, email me and I'll give you one of my ten "invites" to the beta.) The site has an elegant interface and high quality video.  (I watched it in my office on a 24" Mac from six feet away.  It was great.  There just might be something to this TV on the Internet thing.)  And though the programming selection seems scattershot - just 5 episodes of House, 9 episodes of The Office, the entire 39 episode first season of Alfred Hitchcock Presents but none of the second or third seasons - I can't be too critical of any site that lets me watch all of Arrested Development whenever, wherever and for free.   

Also see Fortune Magazine's fawning piece about the company, a joint venture between Fox and NBC, with a $100 million investment from a possibly crazy venture capital fund.  The article, complete with photos of geeky programmers and laughing execs, reveals Hulu has spent $15 million so far, is run by a former Amazon executive Jason Kilar who brought a start-up culture to the venture (we're told he "abandoned the palatial corner office he'd been assigned in Santa Monica for a near cubicle") and that Google has nicknamed Hulu "Clown Co."  Cocky bastards, those Googlers. 

The famously fallen (and savvy) Internet analyst Henry Blodget explains Hulu's business model here:

• Hulu is the exclusive distributor of ad-supported streaming content from Fox, NBC and any other premium content provider they can sign up.
• The content provider gets 70% of the revenue.
• Syndication partners (e.g., a Hulu channel on YouTube, if that happens) get 10%.
• Hulu keeps 20-30% (depending on if there's a syndication partner).

According to Blodget, the content suppliers have first crack at selling the ads, with unsold inventory bundled into genres and sold by Hulu.  (Ah, bundling - the first of many reasons why the WGA and DGA need to start staffing up on auditors.)

The Fortune article ends with a couple of quotes from CBS' head of digital initiatives, Quincy Smith.  First, Smith says, "The economics have to change."  In other words, Smith doesn't think paying 20-30% of ad revenue for internet distribution makes sense.  Given that Blodget's most recent critique of Hulu's business model ("Hulu: Great Product, Still Screwed") argues Hulu needs to take more than 30%, this could be bad news for the guys who chucked in the $100 mil.

Second, Smith criticizes what we might call Hulu's creative model, it's vision of how the internet and entertainment ultimately converge: "If the web is just another way to watch TV, I think I'm going to slit my wrists." 

This continues a critique Smith began back in September here.  The gist:

• Premium content owners should make sure audiences can find their content "anywhere, anytime on any screen."
• Hulu, therefore, should focus on syndication and waste neither time nor money building a destination
• Audiences (who Smith charmingly calls, "the bulk of God's children") want clever clips and interactivity, not the whole episodes Hulu focuses on delivering.

The bigger question raised by Smith's quote is a creative one: Is the most important thing about the Internet really just that it delivers the same old TV over different pipes?  Or shorter, lower-budgeted versions of traditional TV? 

Or is there something more here, something to invent that uses the unique social and interactive aspects of the Internet to tell stories in new ways?  My view is there is and that, as writers, actors and directors with some claim to authority in the realm of storytelling, it's our job to figure out what it is.  If only to keep Quincy Smith from doing himself in.

Finally, for a short history of the business and a spirited discussion in the comments section, check out the Geek in Chief's take on Hulu in TechCrunch.  Comment #11 is surprisingly vitriolic.

Comments

[Scott Ellington]

Last week (because of a tip) HULU made my top-ten list of four-letter words in English. (#1 is "FREE"). This is a beautifully researched and extremely timely post!
I counted only six features, and gaps in the television offerings are deeply strange, but the suits&haircuts got a lot of HULU very right, and that ain't hay.

[geo]

Umm, some of us *like* TV content more or less the way it is. I don't need/want to be interactive, thankyouverymuch.

I surely would like to see happen a new business model, which Hulu is NOT, fundamentally. The reality is that if there was any justice in the world the creative people would be getting together and begrudginly deciding that, well, okay, darn it, the distributors are a necessary evil, so let's go ahead and give them (ouch! Ouch! OUCH! OUUUUUCCCHHH!!!!) their 2% (tears flow as the admission is ripped from the creative types). While the creative types sliced the 98% pie with the infrastructure people.

I still have hopes the internet can move us further along towards that model, over time.

[Scott Ellington]

I wish HULU well. I like the idea of one-stop online shopping for sixty years of television content and a century of features wrapped in a single bow.
If the various factions of the media cartel ever make lasting peace with one another, HULU might yet become a watcher's paradise; a writer's permanent hell.
On the other hand, content created After Ratification of the current MBA had better be aimed past the oligopoly.
I can only hope that your provocative post has gone largely unnoticed because the people most directly affected are too busy designing the future of entertainment to bicker about its past.

[David Nett]

What constantly amazes me after all of these years living with the growing omnipresence of the internet, certain people and groups still believe there's a *single* answer to content online. I'm developing a web-series right now, and I met with an infuriating producer friend of mine who is utterly convinced that his model (which very much mirrors Smith's) is THE model for internet success, so much so that he's not even willing to entertain the idea that longer-form content, more traditional content, or other new ideas for creating/distributing content.

I guess I just don't get it. The reason the suits are so attracted to the internet is because distribution, ultimately, is so crazy-cheap that you can try anything. So why not try everything? For the past 12 years, my day job has been in the online software world. Almost all of the major successes of that period happened because some kids somewhere used the open nature of the 'net to try something the suits told them would fail. There were, and continue to be, a lot of failures as well. But why the hell not try?

As for me, I know some folks will always gravitate toward shorter (<5 min) clever, one-off content. But some folks are longing for more robust ongoing story, maybe even content very similar to what they get on TV now. I, for instance, am an internet junkie, but I'm mostly bored by the endless stream of clever 3 minute video. I want *story*, dammit!

The good news is there's plenty of room on the internet for all of us. Some stuff will work, some stuff won't. The important thing here is that A) we make this about CONTENT not about NETWORKS (and make no mistake, HULU is a network, just in a new model) and B) we make certain our unions stay abreast of the trends and technology and figure out a way to encourage new exploration without giving big producers/distributors our souls in exchange for a few pennies. If we manage to do all of that, a content-rich internet, with programming of all shapes and sizes, *much of it even high-quality*, could well be the happy result.

[Scott Ellington]

David,
I've just been listening to a Heroes-insider discussion of several issues entirely relevent to the transition of entertainment to a new and improved distribution model that isn't incredibly provincial and antiquated. There's even a fairly heated exchange (near the end) concerning suits' obstructive fixation on the financial superiority of episodic stand-alone versus longform, seasonal arc-itecture.
It seems that nothing is more persuasive to corporate types than a competitor's success. Heroes is "just another exploitable property" that gave addtonal rise to global piracy because the suit-mindset hasn't foreseen unqualified success.

http://cms.mit.edu/news/2007/11/forum_nbcs_heroes_appointment.php

[VDOVault]

I'm not that impressed by Hulu...it didn't have a lot of content I was interested in...the WKRP in Cincinatti episodes are those 'butchered to hell and gone no authentic music' 1990s syndicated episodes (which are also what is on the offical US releases for Season 1, those cheap bastards at Fox who wouldn't even pay for a 3 second clip of 'Fly Me To The Moon' as played by Jennifer Marlowe's doorbell chime)...there are only 5 clips for Law & Order Criminal Intent (and there are way more clips on the USA Network site, not to mention those clips are more interesting, like behind the scenes interviews and not commercials or promos). Also the site was down for a substantial part of today and worse Hulu displays your viewing history unless you specifically go in and delete those episodes from the list. It's one thing for me to choose to share a playlist with the world, but to default display where I've been for everyone to see? Uh I don't think so Hulu.

If you don't think of Comcast as the devil you can always check out their site fancast.com which has a lot of the same content as Hulu does.

Of course if you live outside the USA I understand that you're SOL for using either Hulu or Fancast (no one outside the USA will be able to use either site for the foreseeable future...the Hulu blog (http://blog.hulu.com) has one amusing post in which a whole bunch of non US TV fans ranted in the comments section and said they are going to keep to getting their TV illegitimately on the P2P sites because they can't get legal access to Hulu.

I smell an underserved market...

[Scott Ellington]

Susan,
Logging into HULU a few moments ago enabled me to identify titles that weren't available last night...like The Dick Van Dyke Show's three non-consecutive, first-season episodes representing the 158-episodes that MAY show up in coming weeks.
Last night there were six feature films. This morning there are at least fifty full-length movies. The Big Lebowski, Red Dragon, and Kagemusha will get a chunk of my attention tonight, just as the pilot episodes of The Bob Newhart Show, Lou Grant and The Mary Tyler Moore Show caught and held my eye a couple of nights ago.

[David Nett]

Scott --

Thanks for that link. Fascinating, And, yeah, this story-vs.-episodic fight is not new to the internet. I'm an actor just starting to flex my writer muscles, and the couple of ideas I've managed to pitch so far have mostly been met with the standard "terrified of serial story" responses. ("Why can't the story, you know, tie-up at the end of every episode?")

I always try to point out that I am a prime demo TV watcher (25-34, upper-middle-class income, 3+ hours of TV per day), and all of my favorite shows are serial. What it boils down to is that producers/networks are terrified of commitment, and assume viewers are, too. I'll admit, it is hard for folks without a DVR to keep up with LOST, say, in first-run. But with alternate distribution models (iTunes, streaming-ad-supported, DVD, etc.), you can catch missed episodes easily (and contribute to the revenue stream).

The internet should, I hope, contribute to a golden age of serial content. Fingers-crossed.

[Katrina]

Why do I watch video on the internet? To catch up on tv shows I've missed or (in the case of Hulu) watch shows I haven't seen in years. Interactivity I could care less about - when it comes to internet content I want a STORY. I haven't yet been gripped by any fresh content online. I'm also not a fan of short clips - maybe I'm an old time tv viewer by nature, but stories that can be told in two or three minutes rarely compel me in the same way longer ones do. I don't want to have to forty three-minute clips in order to see a story arc.

Hopefully in the next year or so that will change and the internet landscape will look drastically different. Until then, I'll be catching up on old episodes of Ugly Betty on abc.com.

[Scott Ellington]

David,
Jesse Alexander used the word, "exploit" rather frequently. He also seemed remarkably resistant to two of David Thorburn's points; that transmedia storytelling stumped many of the best minds of a generation of writers for twenty years before narrative FOR television matured; and that the longform vs bitesized debate has been explored brilliantly, innovatively, and very successfully before Heroes started making bonehead mistakes, as though Hill Street Blues actually were as dumb as her remembers it to be.
The Buffyscape alone survived an attrociously mishandled introduction as a feature to turn tons of heads away from major channels, where it ran for seven seasons, spand 2.5 spinoffs and STILL has amazingly creative, longform legs for Darkhorse Comics in Season Eight AND in the two Omnibus collections which were produced by almost absolutely other people than the Mutant Enemy armada it created.
I think "The Smart Money" doesn't know dick about audience. Their only weapon against creative intelligence is discouragement.

[oakling]

"If the web is just another way to watch TV, I think I'm going to slit my wrists."

Boy, he's dramatic, isn't he?

Clearly the web isn't and hasn't been any such thing; this is just one little space that might be for that. I'd like to see it be much more, but I'd be just fine for the moment with being able to catch up on this whole season of The Office online and NBC still only gives out whole-episode content grudgingly and sporadically. and with continued developments in watching video content (like the iPhone, of course) I'd say that there's a reasonable market to keep exploring TV online.