Posted 24 October, 2009 in:

Hulu: Pay Model?

Pricing models are a common problem for books, news, images, videos, movies, television, music, video games, software, web applications, academic articles, and the like. Will Hulu find the solution?

Various sources (eg, The Guardian: Roy Greenslade: Murdoch’s propaganda campaign to charge for content) reported about hulu.com’s plans to charge for access. The problem is that corporations tend to overcharge for their content. Then they complain about an alleged sense of entitlement when their customers supposedly want it for free. They are reading things wrong: there’s very much a sense of entitlement, but it’s one not to pay too much. This goes for all forms of content and “intellectual property”: books, news, images, videos, movies, television, music, video games, software, web applications, academic articles, and so on. Free is less than too much, so free wins over too much every time. People deserve payment for their creations, but the economics dictate that how much they charge and what they are prepared to deliver (ie, their pricing/business model) will change the composition of their customer pool, determining their revenue. Before the digital revolution, all sorts of sharing occurred that wasn’t priced in to their model, and yet no one screamed bloody murder over one newspaper getting passed around the coffee shop or office. The sooner the content creators start moving to alternative models, the sooner they will find the sweet spots, and the sooner they will get paid for their creations. But if they merely try to copy their old models in the new landscape, they are liable to find themselves with lingering pain for quite some time. As I did not see specifics on the pricing/business model that Hulu will be using, I will withhold judgment about this move. But I will say that if they plan on overcharging, they might as well buy some Going Out of Business signs while they’re cheap. Update: An article on mediamemo.allthingsd.com, How Much Will You Have to Pay for Hulu? Nothing. How Much Will You Pay for “Hulu Plus”? Good Question. states the pay content will be in addition to the existing site, rather than moving some content to for-pay so it doesn’t sound like they are doing anything very dangerous with regard to their business model. I just hope they get creative and take their time to create a better model that can be mimicked by others. It can work, if they don’t get too greedy.

Please Deposit Two Cents: Cancel reply