Hulu Authentication is Bad Business Move, Cable Companies Bullying Consumers [Opinion]

Hulu Authentication is Bad Business Move, Cable Companies Bullying Consumers [Opinion]

The CEOs of both CBS and now Time Warner have spoken out in favor of Hulu moving to an authentication model. Personally, it seems like an anti-trust suit to me in regards to Time Warner, who should have no say in the matter. Their CEO seems to be bullying consumers into sticking with a cable plan when people, like me, are cutting the cable and using Hulu instead.

First off, the majority of the TV content on Hulu is free over-the-air in most markets. So why should a consumer then be forced to have a cable subscription just to access that content on Hulu or Hulu Plus? Time Warner clearly fears the coming change to a digital lifestyle where people no longer pay high monthly fees for bloated channel packages of crap that they don't watch. For example, I save $50 a month by dropping my cable and I didn't lose a thing as all the shows I regularly watch are broadcast anyway. If I do miss something, like when the DVR is busy recording, I turn to Hulu Plus. Why should I also have to pay for cable?

It seems to me that moving to a cable subscription authentication model would be Hulu shooting themselves in the foot, giving in to cable company bullying and generally being unfair to its users. They already show a massive amount of ads and are generating hundreds of millions in revenue. Clearly that was enough for the major VC investor in the company, but not for the content-providing owners.

So why would they take steps backward and devolve into an online extension of cable systems? It seems that the networks are under pressure from the cable companies because the latter are losing revenue. Well guess what, welcome to the future. Your antiquated and outdated channel package bloat won't fly anymore.

Cable Companies Bullying Consumers

Time Warner CEO Jeff Bewkes cited HBO Go as his basis for it stating it improved customer loyalty. But HBO Go is only available to those who subscribe to HBO already, so it's more for the same price. Hulu authentication would, for many, require an additional fee, for something we already know we don't need. His logic is flawed and it seems like Time Warner is simply trying to protect their outdated revenue model of stuffing dozens of useless channels into packs and then foisting them upon subscribers who probably won't watch them 99% of the time.

The whole reason that many use Hulu is so that they don't have to have a cable subscription.

Others have pointed fingers at NBC Universal for this new shift at Hulu. You'll all remember that they merged with Comcast which is the largest cable operator, home Internet service provider, and third largest home telephone service provider in the United States, according to Wikipedia. When the FCC agreed the merger they stated that NBCU needed to be hands off on Hulu. Why? Because they knew that something like this would happen and tried to do a pre-emptive strike. Well so much for that. Perhaps they simply should have blocked the merger. Oh wait, it was all about that one person on the committee getting that super cushy job right after the decision.

So now the corruption is so plainly evident that it once again negatively impact consumers because of the corporate leaning government.

Authentication is Bad Business

Requiring Hulu users to authenticate with a cable subscription is just bad business and even Providence Equity Partners knows it. They sold their share of Hulu and authentication was apparently the reason. Considering that they are a company whose sole reason for existence is to make money, it seems that they know the move will not make money for Hulu, but lose it and they wanted to cash in their chips and call it a day with the online video service.

Some fingers are also being pointed at FOX in the matter who is allegedly making a deal with, once again, Comcast for TV Everywhere.

Well, Hulu was the most forward thinking of the TV-to-Internet companies. They certainly did a lot to help make online video grow. Now it seems they will be pulled back into the quagmire from whence it was born and be directly tied to cable subscriptions, even though most of the content on the site is freely available over-the-air. Remember, NBC, FOX and ABC (Disney) all broadcast you content for free, so why should consumers have to buy a cable subscription to watch that same content online?

This author has to wonder, where is the FCC and the DoJ in all of this?

What's it Mean for Online Video?

It's a shot in the foot that's for sure. The Internet and online video promised to unchain us from the restrictive and cost prohibitive cable packages that are bloated and antiquated. It promised to be the frontier and expand the minds of those companies but instead, they have pushed back with intimidation and bullying which basically amounts to "If you don't pay us, you can't have that content, which is also aired for free..." and that to me makes no sense whatsoever.

What's it mean for those making original web video?

Well, if Hulu begins to require cable subscription authentication there are going to be people who don't have cable and therefore can't watch all the content they want on Hulu. It means they'll be video entertainment-starved consumers looking to through their collective weight behind video that entertains them online. I for one will not buy cable just to watch content on Hulu. In fact, if Hulu goes to an authentication model and I can't get the shows I watch there, I will simply cancel my subscription and use that money to find other worthwhile video entertainment online and whenever possible, donate to the cause. As I recently wrote about the Flattr and DailyMotion deal, one could now begin to help fund content for production online and not have to buckle to the monopolistic actions and subscriptions of the cable companies. Granted, it's only $8 a month. But I only watch around 10 shows a week so I could give a dollar to 10 online shows I watch and get around the same amount of entertainment. Or I could save it up and donate to some Kickstarter projects, or simply just take all that leisure time and move it into a more productive endeavor, like making my own online video content.

Sure, most consumers won't think like this. TV is like a drug, you get hooked on it and it's hard to ween off of it. It's a fact of life in America, millions sit and waste hours each day spacing out like couch potatoes absorbing content (a lot of which is utter crap). But we've now seen what the future can be and will long for it. We know it can be online, on-demand and content rich. We know that it can be of better quality than the crap the broadcasters try to shovel down our throats. It can be story-driven, well-written and less formulaic. It can have less advertising interruption, great production values and be far more interactive. Now that we have seen it, we'll want it more and more. If we can't get it from cable and TV broadcasters then we will turn to the very talented, highly creative masses of online video creators and publishers and seek out the video entertainment we need.

Speaking from personal experience, I already know the content is out there, and it's just a matter of going and finding it. So I think I will start a weekly "What I'm watching to replace TV" series to share with everyone the great content that I'm consuming. Maybe not here, it's not exactly ReelSEO material, but somewhere, and I'll be sure to tell everyone where that is.

Posted in Internet TV
About the Author -
Christophor Rick is a freelance writer specializing in technology, new media, video games, IPTV, online video advertising and consumer electronics. His past work has included press releases, copy-writing, travel writing and journalism. He also writes novel-length and short fiction as part of Three-Faced Media . View All Posts By -

What do you think? ▼
  • cordcutterguide

    I agree with 50% of what you say. I don't agree authentication is bad for business - at least not the cable  business. Giving content away for free on the internet probably does take away from paid plans.
     
    I do agree that the solution is competition, especially competitive video options. I applaud Netflix and Amazon for jumping in with new unique content of their own.
     
    http://cordcutterguide.com/
     

    • Christophor Rick

       @cordcutterguide Authentication is bad business when 90% of the content is on-air for free prior to hitting Hulu. Look at Hulu's content and you'll see that it's mostly major network stuff. Why should we have to get a pay TV subscription to access that? It's bad for Hulu because some of us will simply stop paying them if we also need a cable subscription. They were supposed to be our alternative to that crap, now they're getting in bed with them and it's probably NBCU/Comcast and Time Warner Cable pulling them under the sheets.

  • ConnieChristians

     videoconnie I have to agree with most of what you wrote. I worked for the devil(s)- Comcast and Cox Communications, in a former life- bloat IS the best term I would use to describe cable lineups. Their negotiations with equally greedy giants like ESPN force a lot of crappy programming into packages that consumers can't avoid. Their grasping share-holder driven practices care little for satisfying their customers and more for grabbing their money (they don't take very good care of their employees either). Cable subscriptions have been dropping off for years, according to their own reports, while internet subscriptions are growing rapidly. In fact, they can't upgrade their head-ends fast enough to handle all the demand for 4G phone content and internet usage. I have wondered at times, if they purposely dilute the signal to discourage streaming online and force people to give up and go watch cable TV instead. But I still predict that On Demand programming online will grow in spite of their efforts to co-opt and control it... And it WILL change as more people just say no, turn away from cable and find or create better viewing options. Too much has been seen and done online to prevent that growth- the genie is out of the bottle.
     

  • cordcutterguide

    I agree with 50% of what you say. I don't agree authentication is bad for business - at least not the cable  business. Giving content away for free on the internet probably does take away from paid plans.
     
    I do agree that the solution is competition, especially competitive video options. I applaud Netflix and Amazon for jumping in with new unique content of their own.
     
    http://cordcutterguide.com/
     

    • Christophor Rick

       @cordcutterguide Authentication is bad business when 90% of the content is on-air for free prior to hitting Hulu. Look at Hulu's content and you'll see that it's mostly major network stuff. Why should we have to get a pay TV subscription to access that? It's bad for Hulu because some of us will simply stop paying them if we also need a cable subscription. They were supposed to be our alternative to that crap, now they're getting in bed with them and it's probably NBCU/Comcast and Time Warner Cable pulling them under the sheets.

  • ConnieChristians

     videoconnie I have to agree with most of what you wrote. I worked for the devil(s)- Comcast and Cox Communications, in a former life- bloat IS the best term I would use to describe cable lineups. Their negotiations with equally greedy giants like ESPN force a lot of crappy programming into packages that consumers can't avoid. Their grasping share-holder driven practices care little for satisfying their customers and more for grabbing their money (they don't take very good care of their employees either). Cable subscriptions have been dropping off for years, according to their own reports, while internet subscriptions are growing rapidly. In fact, they can't upgrade their head-ends fast enough to handle all the demand for 4G phone content and internet usage. I have wondered at times, if they purposely dilute the signal to discourage streaming online and force people to give up and go watch cable TV instead. But I still predict that On Demand programming online will grow in spite of their efforts to co-opt and control it... And it WILL change as more people just say no, turn away from cable and find or create better viewing options. Too much has been seen and done online to prevent that growth- the genie is out of the bottle.
     

  • Daniel

    So what actual consumer value does a cable company provide? Telecommunications infrastructure. Cable companies are very good at the technology side of the equation. So they should charge for that -- through Internet access subscriptions of varying speeds. When cable companies get involved in content licensing, everything gets messy because the consumer no longer decides what is valuable. The cable companies are middle men. If the content providers really believe their content is valuable, then they should sell it directly to consumers. Maybe everything that isn't over-the-air should be pay-per-view, so instead of paying ESPN for a cheerleading competition that I'll never watch just so I can watch an NBA playoff game, I'll just pay to watch the NBA playoff game. At the very least I could pay ESPN directly for all of its programming. Some people might say, "So health insurance companies should stop negotiating contracts with doctors and hospitals then!" Perhaps...maybe health insurance should switch to a model that pays the customer a flat fee based on a diagnosis and then enables the customer to shop around for the best value in medical services -- like we do with car insurance claims. With the right regulations, this might actually work in the case of cable and health insurance companies to get them out of the middle!