Free ain’t what it used to be. It costs a lot of money.
Keeping content free can be very expensive. Just look at the decision process that Hulu is going through. On one hand, the site is an unquestionable success measured in visitors. People want the content. On the other hand, it doesn’t generate a consistent, predictable revenue stream. It has all the risks associated with any advertising supported content business. To make matters far worse, their best and most popular content is the key to the largest and most consistent revenue stream that content licensees have, subscription fees from your local cable/sat/telco TV provider.
So what about this as an interim solution for Hulu and other comparable sites. Take a page from the first years of Facebook. Limit free to people with qualified .edu emails that register.
Students make up a big chunk of the population most likely to make the time to steal content . So why not just recognize it ?
Sure, it may make some other people unhappy. Sure, its not foolproof. But its a starting point.
Im curious what readers think.
One other thing.
I live on a university campus that has supposedly blocked all piracy and torrent downloading, etc. My next door neighbor has a huge database of content that he shares with many students, easily bypassing the university block.
Students are just as smart and probably smarter (with technology) than the people trying to prevent them from piracy.
Comment by adampriest -
Paid content will only drive people to piracy.
People don’t care if the music star or movie studio doesn’t get their money. If they fail, someone else will come along to entertain us. There’s a never ending supply of entertainers, no one cares if a singer doesn’t sell records. Besides that, what is the consequence of piracy? It’s illegal sure, but it’s not a serious crime that is pursued by the law. And is it morally wrong? Hell no. You can go to the local library and check out a thousand CDs and DVDs for free.
Comment by adampriest -
Very interesting– though of course as pointed out it would include people like me who work for the Universities, and I believe the one I work for lets everyone keep their addresses forever (though the one I graduated from does not– cut mine off some months after with no warning). Another possibility– I remember reading that Hulu blocked the PS3’s browser. I think they should take the opposite approach and go after the gamers… for example, make it a free app for Xbox Live gold users. I would have to think MS would love it as it would be a good incentive to upgrade to gold, and if it goes over really well like the Netflix app (which has had over a million downloads I think) could be profitable depending on the deal they worked out. The logic would be exactly the same as you mentioned– this is a group that is highly likely to steal content. Sad to say, as I’m an honest gamer myself and all the pirates give us a bad name, but the fact that MS recently banned something like a *million* modded consoles definitely does tell you something about the rates.
Comment by bucfanpaka -
Students will use the service as long as it is free. When it isn’t, they’ll move on. Hulu shouldn’t expect to build any brand loyalty by providing free .edu services for a period of time.
Comment by Mike Hart -
This is ridiculous. Facebook’s limit to .edu addresses wasn’t about REVENUE or PROMOTION, it was about ACCESS. They wanted to make sure that the only people who could get onto their network were university students/professors/alumni/etc. — to wit, anyone who was EVER associated with a university. Now, switching back to Hulu: does that sound like the right group of people to be giving a product like this to for free?
Comment by writtenMania -
Mark, here’s the thing. people without edu emails didn’t get facebook because they couldn’t, they didn’t get it because they didn’t WANT it. The demand rose greatly for facebook when it got much more popular and acceptable for all ages. However, the demand for TV will be the same regardless of what HULU does. People that want to see it, will do just that. Everyone knows someone that is willing to give them an edu email.
Comment by qboy316 -
I like what courtlandallen had to say – especially about convenience.
I too am 22 years old and remember the days of all the music file sharing with Napster and LimeWire…some of which still continues today.
That being said, I was a huge user of Napste, Morpheus, LimeWire, and MyTunes(music sharing over a central network)…but with the recent emergence of the iTunes store in the last few years, and the demise of quality content being available via the illegal downloading programs – I found it much more convenient and less frustrating to just pay the $0.99 for a song on iTunes. In fact, over the last four years, I’ve spent over $300 on music through iTunes, but when it’s only $0.99 at a time, it doesn’t seem like such a big deal.
I think Hulu definitely runs the “online TV” market, but as long as competitors like YouTube and Crackle provide TV clips and episodes for free, Hulu will have a hard time retaining their non-.edu audience.
That being said, I fell like their main audience is .edu-based anyway, so I can’t really say how big of a difference it would make without having some legit stats. I do know that for Hulu users who are not .edu, or recent .edu graduates – they probably receive the content they watch from .edu users. For example, my father and uncle wouldn’t even know what Hulu was, if I didn’t email them family guy clips on it.
Comment by sandlott -
I think the already distributed material (the “stolen” material) is lost forever. Trying to chase ground on that material now seems like a waste of time. It’s lost, write it off.
Why not work on improving file format protection? Mark, do you know if there is any research done, or currently made on improved file format protection and file distribution problems?
It seems like if you make it hard or even impossible to share files across different IP adresses that it would make it less likely for people to succeed in peer-to-peer file sharing?
And also, in order to still make it possible to share files (because it is a good way to save time and also saving the enviroment from shuffling papers etc), why not make it possible for these new files (the new format) to be distributed only by a certain legitime gateway that is well controlled by someone. A legitime source? A company? Several chosen and well regarded companies? A govermental entity?
This way it would potentially make it impossible to share files in an illegal way? Because everything would be monitored and everyone who makes money on digital or media products would get paid for certain.
The gateway would have a key that has to be matched against the file key. If the right keys are not matched the file is denied to be shared. The encryption idea already exists so it shouldn’t really be that hard to implement in practice?
The gateway key would be a top secret of course and I guess you could change the gateway key every other day or week or month in order to make it impossible to hack or make it harder at least to succeed in a prolonged breach.
What do you think, Mark? Stupid or a good thought? Possible or not possible? If not possible, then why not?
Good blog by the way. The fact that you are a billionaire makes it so much more interesting to read:).
Comment by startuppro -
Mark, how would you manage the transition from free to paid? I think building up a user base is good (duh), but how would you get from here to there?
mike
Comment by mojomikey -
Free will always be the way internet works, Mark. You still don’t get it, Mark. If you and Rupert go to a paid content model, you’re both gonna lose you’re ass.
There’s always a new way to get new content free. Take a look at the guys on twitter doing Breaking News. You can’t stop the next new thing. Rupert can’t stop the one after that.
Mark, you need to figure out how to make money with the free internet content model, or adjust to the idea you’re done with being a innovator, and moved into that next stage of holding on to the fortune you made when you were an innovator.
I like you, Mark. You ain’t Rupert. You’ve done quite a bit of good when you had to chance to. Don’t get stubborn now like Rupert has, and lose your ass trying to hold back the rising tide. Information has little value anymore. There’s too much of it out there.
Comment by adampdx -
Isn’t .edu for the USA only? Different countries have different schemes e.g. the UK has .ac.uk, but Ireland has no academic subdomain to .ie. Is the rest of the world outside the USA worth including?
Comment by brian t -
I think a better platform for Hulu would be go to the Freeium route. I am a heavy user of Hulu and in no way would it force him to cancel my cable in order to watch everything on Hulu. I like the TV experience.
But if I am Hulu, I would start adding in more advertisers and commercials into the programming. Then I would develop a subsription model where all the content is still available to everyone for free, but have two paid tiers where I can subscribe. Make the free tier content viewer watch 8-9 15 second commercials in the program, 2nd level for goes back to the normal 3-4 15 second commercials, and the highest tier is commercial free. Make the second tier 8-9 bucks a month and I am in all day for that.
This route enables Hulu to continue to grow, continues the FREE content we all know and love, but allows them to monetize their viewers in a better way. Plus once they have all that data from their subscribers, then internally you can figure out multiple ways to monetize that data as well, creating multiple revenue streams for the company.
twitter.com/mcalvey
Comment by mcalvey -
here in new york and we spent tons of time in that theater. maybe some type of school adoption for theaters – maybe packaging unlimited movie viewings into a subscription type system that would appear for a fee on student tuition.
nonetheless, anything devised to sqeeze money from recorded non-live data content is life support. live content has immediate value online – all the rest asymptotically approaches zero.
i think all the focus on monetizing online content is leaving the fact that there is real world opportunity on the table.
Comment by killerblyx -
not sure of this. someone posted above the reason he had cable was for sports – i.e. live events.
think about how much content sports produces – obviously you have. the fact that hulu doesn’t have a deal with a sports league for broadcasting is interesting.
the music industry has learned that the value of music as content is asymptotically approaching zero. this is why new artists are signing “360” deals – contracts where the label is proiting off all the artist’s endeavors post music release (similar to the way Dwayne “the Rock” Johnson has a WWE producing credit in every movie he appears).
Which brings me to the WWE and LivePlanet and movies. Places to go – the fact is – the more you can get everything at home – the more you’ll need places to go to diversify experience. i remember seeing an interview with the Starbuck’s CEO one time and he said he never envisioned StarBucks as a coffee retailer – but instead – as the 3rd place (most people spend majority of time home/work or school/home) people spend time.
Movies need to offer diversity of experience. Perhaps high end fine dining theatres which only show high end esteemed Oscar-type films. These types of places serve alcohol and offer a subscription model instead of a per ticket payment system in order to ensure consistent revenue stream. A teen type theater system that is geared towards what marketing deems exciting for teens – including diversifying from what is now considered traditional movie eating fare (product diversification).
when i was in college i was walking distance from one of your sunshine theaters `
Comment by killerblyx -
That seems like a very good idea and I’m not even a college student. So I’m sure people are going to hate it.
Comment by Rob Abruzzese -
Pingback: Basketball Blog.com – The Best Basketball Blogs Resource Online » Blog Archive » Limiting Free to .edu
I don’t think it’ll work. Students will be the only audience of Hulu if they charge for non-students to watch videos. Doesn’t Hulu have mostly over-the-air contents anyway? I use Hulu simply for the convenience. If they start charging, I’d just watch the shows on TV. Just my thought.
Comment by sangaroo -
Mariam-Webster used to do this (free for .edu) with their online dictionary a lonnnnnng time ago. Obviously they punted and went totally free/ad-supported as other sites came online that provided similar services for free.
This is a similar refrain for the Internet, and one wonders when/if it will all end. Company A has a good idea, offers it for a modest fee, and then Companies B…Z do the same thing, but for free, figuring there is “value” in obtaining Company A’s customer base. If this was 10 years ago, Companies B and C would likely be bought out for millions of dollars, and at least a couple of people would go home happy.
But now, that doesn’t happen, but the copying ideas and releasing them for free under the assumption that if a lot of people want it — but want it for free — there is value in giving it to them thing still happens all the time.
I wonder to what end?
Comment by schizoid -
I’m 22, and my generation has been downloading music and movies illegally since the dawn of Napster in 1999 — almost half of our natural lives. In my experience, there are only a few big reasons why someone my age pays for content:
– moral opposition to content theft PLUS money to spare (rare)
– obscurity of information / lack of computer knowledge (a decreasing phenomenon)
– fear of getting caught (decreasing as well)
– said content isn’t worth downloading b/c it’s too hard to find, too hard to get a high quality version, or should be watched live (decreasing as well)
If Hulu were to limit their free content to .edu users only, their main concern would have to be getting students to stick with the service after graduating. To do this, they should understand what makes Hulu great, and that’s my 4th bullet point above: it’s simply better and easier than downloading. Can they work in this direction to make it so good that people don’t want to leave?
Live video is also a major area I think Hulu would benefit from entering if possible. Most of my friends are recent grads, and all of them have cable/etc for ONE reason: live sports. Everything else they just download to their laptops, and connect to their TVs.
Comment by courtlandallen -
Ruckus tried to do something similar to that. http://en.wikipedia.org/wiki/Ruckus_Network
They had it so students got music for free and alumns had to pay. I used to use it and I thought it worked pretty well, but they part of their revenue model was based on ads.
Comment by geoffdutton -
Its a great idea, but the problem with that is, its not ONLY college kids that are “most likely to make the time to steal content” anymore. It is people that went to college from the last ten years on that are most likely downloading illegally. Once you’ve gone to college with the internet, you gain knowledge of ways to get free music, movies, software, etc through networking, because that’s what college is, a giant network of people with a lot of free time. Even for people that have jobs now and are making money, they continue to download illegally because its easy and they are used to it.
I guess the one good thing out of creating free .edu accounts on these pay sites is to get them used to these sites when they are young, which would make paying for these site much easier as they get out of college.
Comment by austintprice -
Makes you wonder if this is one of the underlying reasons why Microsoft offers such heavy discounts to .edu email address holders. For example Windows 7 for $29 versus $149.
Comment by mikeinkeller76248 -
As I suspect Microsoft would attest, after several rounds of marketing MS Office “student editions” to .edu addresses only…
It’s not tough to find an .edu address — or someone who has one.
I don’t dispute the idea that, at some point, premium tier content on the web will be inevitable (let’s remember — it’s not THAT long ago that nobody paid for television service). But it’ll have to be a more effective pay-for-content model than that.
Comment by ctzdesign -
In the regards of pushing a website towards financial sustainability, has the Facebook model really been a success for another website to potentially follow? A very large percentage of their ad revenue is coming from ad servers that serve up very questionable and very obvious scams. At least Hulu has found video ads from reputable vendors and not teeth whiteners and singles websites.
Comment by bearflash -
Makes sense I guess…It’s interesting that you mention Facebook after their letter to users suggesting that they are making significant changes to the site. In Zuckerberg’s recent blog post (http://blog.facebook.com/blog.php?post=190423927130) he talks about eliminating the regional aspect of Facebook. Any thoughts?
Comment by adamco -
I think that is a solid point…as a college professor, I am shocked at the number of students who feel entitled to illegally download anything they can get their hands on (often times during class)…in the case of Hulu, they can either reach out to the .edu students with Facebook-esq solutions, or continue getting pounded by the pirate movement
Comment by proudlu -
Biggest issue is that many Universities give out .edu addresses to alums and their college addresses are their permanent addresses. I also imagine that universities probably have the most bandwidth concerns and probably currently have the best controls in place for piracy (after corporations). I am not sure if it would eliminate as large of a percentage of piracy as you expect.-Serge
Comment by sergekass -