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Mobile Video

Pulling a Hulu

6:15 PM -- MSOs are expected to offer TV Everywhere services as "free" supplements to their traditional video subscriptions early on, but at least one analyst firm already thinks those days will be short-lived as demand for TV Everywhere grows.

A new study from The Diffusion Group (TDG) , suggests that 60 percent of adult broadband users (95 million consumers) are enthusiastic about TV Everywhere services, and about 34 percent (54 million) are willing to pay at least $5 extra per month for that multi-screen access. TDG says about one third would pay an extra $10, and roughly one fifth would pay more than $15 per month.

TV Everywhere services are being billed as free value-adds, but TDG founding partner and report author Michael Greeson thinks that will change as such services become popular with more consumers and operators have more reason to tap a new revenue stream.

Incumbent video service providers will grow more likely to "pull a Hulu," he says, noting how the Web video hub started off with a free, ad-supported service, and has since moved ahead on plans to launch a subscription-based "Hulu Plus" premium tier. (See Hulu Opens Toll Road and Hulu Unveils Subscription Service.)

Greeson notes that operators have solid rationale to start TV Everywhere as a free service, because it can help reduce churn, but they'll have to adjust that strategy if increasing demand indicates that they are "leaving tens of millions of dollars on the table."

— Jeff Baumgartner, Site Editor, Light Reading Cable

yarn 12/5/2012 | 4:29:57 PM
re: Pulling a Hulu

I thought Hulu still offered a free service but added a premium Plus service that includes more content.

Jeff Baumgartner 12/5/2012 | 4:29:56 PM
re: Pulling a Hulu

That's true. Hulu will still operate the free ad-supported service and charge extra for the Plus version, so we'll have to see if that's how they decide to proceed. I think the report suggests that service providers may choose to take a similar route and offer a premium-level TV Everywhere tier that complements a watered down free version or, at the extreme, just go with a pay-only version down the road.  But until an operator chooses to one or the other, it's speculation based on what the study found.  There's a pretty good gap between someone saying they'd be willing to pay $5 extra month and actually signing up and forking that over.  JB

sarahthomas1011 12/5/2012 | 4:29:55 PM
re: Pulling a Hulu

Even with those findings, I think there will always be a segment of users who won't pay twice for the same content. That's one big reason mobile TV hasn't really taken off. The cablecos all say TV Everywhere business models are "experimential," so I agree that a premium option will come about in addition to a more limited free version.

Jeff Baumgartner 12/5/2012 | 4:29:54 PM
re: Pulling a Hulu

Interestingly enough operators have argued that TV Everywhere services will ensure that consumers won't have to pay twice for the content they're getting from their traditional video subscription, so they'll have some 'splaning to do if they end up charging extra for it because the decision would certainly be met wiht a severe backlash.


That makes me think they won't be doing anything of the sort soon, even if they are tempted by the dollar signs dancing above their heads. So it just may be a question of when, not if. JB


 


 


 

Jeff Baumgartner 12/5/2012 | 4:29:51 PM
re: Pulling a Hulu

Yeah that sling option is free if you don't factor in the box, if you're buying retail or paying a bit extra for a fancy Slingloaded box from Dish, but it would take out any additonal monthly video fee... so long as you're not factoring in the broadband connection that's required to run the slingbox.


But adding a Plus like service and all the content that goes with it into the top level TV subscription package could, as you state, make some sense.


But the whole notion of free might be a misnomer in this sense, anyway. Instead of itemizing TVE , the costs associated with providing that access  could just end up bundled into the bill where it's less noticable, at least that's the  argument that Dan Rayburn spelled out recently, stating that he's hearing that portions of recent Comcast rate increases are helping to offset the costs of the TVE effort. JB




yarn 12/5/2012 | 4:29:51 PM
re: Pulling a Hulu

Yes, after all if you get a sling box you'd not have to pay extra either to see your TV content on your mobile or PC so TVE needs to maintain the principle that reviewing your paid content is essentially free. But suppose you have a basic TV subscription of say 50 channels, then the free service would probably not allow you to timeshift or catch-up content from channels outside your subscription.


However, if you had a premium subsciprion with 400 channels your "free" TVE service would contain the "Plus" content that our basic bundle subscriber would have to pay extra for. I'm just guessing a bit here, but it would make sense because it would give an incentive to keep a full channel bundle subscription under TVE instead of downgrading to a basic bundle and cherry-picking the value add of premium bundles through free replay services.


Also, like with Hulu Plus, I can imagine that the free service would have some limits as to how long TV content you subscribed too remains available for free replay because there's a storage cost. So to extend that "content clawback" period may be worth a small premium. Finally you could include non-TV content as well at a premium (on-demand movies, sports classics, episodes of the Simpsons without the beeps, whatever). So agreed, TVE won't likely all be free.

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