Intellectual Property Law

Hulu update

By Susan Crawford

The Los Angeles Times reports today that Hulu will start testing a monthly subscription service for access to some broadcast programming.  Because Hulu is the leading aggregator of long-form video online, this is a significant step.

Online video is still a nascent (but fast-growing) market.  For networks and TV stations, there’s great concern that online distribution will undermine their broadcast market - and their ability to sell advertising inventory and charge retransmission fees.  As a recent filing by Steve Wildman makes clear, broadcasters’ incentives when it comes to online video may be aligning with cable systems’ incentives:  Less is better.

So Hulu is under pressure:  online viewers want more, but media companies and cable companies (now merging) want control over the windows of distribution for their materials.  “The companies still want to control how, when and in what form their content is broadcast, and aren’t willing to risk traditional revenue sources for the relatively minor money earned through online ads, analysts say. “  (San Francisco Chronicle)

Wildman’s filing mentions the fact that rules that facilitate competitive video distributors’ access to cable programming (so-called “program access” rules) have encouraged competition in the video distribution marketplace.  Cable operators label these rules “forced sharing”.

And, Wildman says, during a call with FCC staff he “discussed the possibility, raised during the call, that a similar regime for online access to content could provide a similar incentive to online distributors of content.”

PC World has a sanguine view of all this: “Perhaps the Hulu Plus subscription is not that big of a deal after all. There are still plenty of places online to get free, high-quality TV, and either way, $10/month is a heck of a lot cheaper than cable!”

Full post as published by Susan Crawford Blog on April 23, 2010 (boomark / email).