There is no love lost between CBS and Hulu. You won’t find any full episodes of CBS shows on Hulu, and CBS’s own site TV.com is so similar in look and feel that one might call it a product of envy. So it should come as no surprise that the knives are still out for Hulu at CBS Interactive.
An email with an article critical of Hulu from CBS Interactive CEO Quincy Smith that was passed around internally (excerpted below) landed in our inbox. Smith confirms that the email is real. Earlier today, he passed along an article from Contentinople titled “Execs Rip Hulu for Giving Away Content” which quotes media executives on a panel laying into Hulu for giving away TV shows for free. The panelists in the article also praise the cable industry’s proposed TV Everywhere model which will make TV shows and movies available online only to consumers who are already existing cable TV subscribers and can be authenticated as such.
Smith passed along the entire article to his executive team, along with a note wondering “how hard it would be to prove that some ratings declines are a result of reckless hulu streams.” CBS’s ratings for the Fall Season premiers have been doing relatively well, compared to other networks. The implication Smith seems to be making here is that maybe the other networks are down because their audience is going online. If he could prove that, it would make his strategy of shunning Hulu look smart.
But he then writes that “Authentication is a nice option.” And his SVP Anthony Soohoo later chimes in: “Authentication will play a huge role in 2010.” Hulu itself may add subscription and pay-per-view options to its service, according to Ruport Murdoch. Smith also mentions some “findings” that support “packing more ads” in online videos.
So what can we conclude from all this? CBS will either be more conservative with its full streams online, or pack them with more ads. Maybe that is what the findings are all about, that online audiences will tolerate more ads for quality content. It is certainly easier to put more ads in online videos than to try to put up an authentication wall (which is really just a pay wall by another name).
Here is the email except (the only thing I didn’t include is the full text of the Contentinople article which you can read at the link above).
From: Soohoo, Anthony
Subject: FW: hulu pricing
Date: September 24, 2009 8:26:44 AM PDTfyi. Authentication will play a huge role in 2010.
——————————————-
From: Smith, Quincy
Sent: Thursday, September 24, 2009 8:23 AM
To: Soohoo, Anthony; Ashe, Neil; Lurie, Zander; Marquez, Michael; Cain, Sarah
Subject: hulu pricingNice way to put it.
We should think about how hard it would be to prove that some ratings
declines are a result of reckless hulu streams and that Authentication
is a nice option
We should also think about if we want to talk the walk on packing more
ads and our findings thus far.
-q——————————————-
Execs Rip Hulu for Giving Away Content . . .
ok so quincy smith should be fired.
Here is another example of an old man who doesn’t understand new media
tv.com are you flippin kidding me?? do we remember pets.com? generic names fail!
Quincy hulu isn’t your problem you are your problem. You do and your board a favor and fire yourself and your vp of marketing cause you guys haven’t passed internet marketing 101 Hulu owns you in that respect so props to jason kilar
content isn’t king twits MARKETING IS KING hulu owns the idea in the mind of tv online its game over quincy just do a deal with them and get your content out there and monetized before they decide they don’t like you and snuff you out of existence when the Intervision medium takes over.
Quincy isn’t that old, and Marketing is NOT king. Content is King and Distribution is GOD! If Fox, NBCU, and Disney don’t watch it, they will dramatically devalue their existing business and Quincy will be right. And GuyWithAClue, get a clue!
Guy with a Clue is an idiot.
Don’t put him near any business whose goal is to actually make money.
my names quincysmith too
God I loathe cable companies.
Um, isn’t Network TV free anyway? If I get it over the air it’s ok but if I get it over the internet it/s not?
That’s like when my brother would rather throw his extra ice cream in the trash than give it to me…
They lose advertising to whoever eventually makes the content available to the user….
Broadcast TV is advertiser supported.
So is Hulu.
What?
His theory is that people watching shows in the manner most convenient to them is a sign of recklessness on the part of content providers? Rather than, say, a good way to keep consumers happy as part of a strategy to stop the decades-long ratings slide of network TV?
Why can’t TV.com make TechCrunch for how awesome their product is instead of leaked e-mails?
Innovate or get out.
CBS has a fall season? Hmmm… since I only watch commercial supported TV on Hulu, I had no idea. CBS is for Touched By An Angel or some such stuff. Meh.
But… I only watch CBS shows on CBS.com and not live over the air too.
Forced bundling cable and online is nuts: annoy your existing generation of customers while ignoring the next …
http://www.pira...oon-for-piracy/
This guy makes me feel better about ditching cable and living with the content Hulu provides me.
What a dino.
CBS sucks anyway. Glad they aren’t streaming to Hulu; makes finding the interesting content that much easier.
- “If he could prove that, it would make his strategy of shunning Hulu look smart.”
That statistic wouldn’t make his strategy look smart; it would show that you can have online content while keeping overall ratings – it would show that TV ratings would decline, but online ratings would increase.
Proving that a new secondary sales channel or demographic is emerging should lead to an attempt to excel in this specific segment.
This is such BS.
I can’t watch How I Met Your Mother on demand with Comcast and the Comcast DVR skips the first minute…so I go to Hulu, which redirects to CBS.com and watch the first few min… If he just put everything On Demand in the first place far fewer people would go to Hulu at all…
recent studies have shown that consumers are unlikely to pay for online vildeo content. http://www.beet...te-reports.html
I like the word choice of “think about how hard it would be to prove….” and not “how to determine if it’s true that….”
I thought the Spin Doctors broke up in the 90s.
The level of greed these people display is utterly astounding.
Hulu has like 15 shows, and you can only watch five episodes. TV.com has a greater opportunity to expand and provide more content to consumers.
It might seem like it is not enough, but I watch shows on Hulu that are too inconvenient for me to watch at regular broadcast times.
For example, you can still watch The Daily Show everyday, just not at 11pm. Shouldn’t bother you that older episodes could expire, you’ve watched them anyway.
Throw out the concept of showtimes and don’t automatically assume Hulu has to be a vault/archive, and you have a reason for Hulu to exist.
No. Hulu has somewhere around 400 shows.
It appears that the BIG TV networks have finally concluded that YouTube is not their primary competitor.
Hulu has done a great job with their service. Although I wish they had an iPhone (remote) app. hint. hint.
We should all welcome the last remaining BIG network to build a competing service. Competition is always good for the end user.
However, “packing more ads” into online videos is not going to win over viewers. You have to build better ways to target viewers & more ways to distribute content. The better content & more engaging experience will win. Not the one with the most ads, barriers to the end user and crappy content.
A pay wall’s a death wish, i’d give up tv completely. I know I’m not alone. They could probably rent movies for real cheap with a Freemium model. But good luck trying to allowing sitcoms charge for their episodes. I believe the iTunes store has been trying this and they don’t seem to be bragging about big #’s at Mac events. So, I’ll assume that was a failure.
I guess they still think it’ll be easy to substitute the ad-paid, consumer-free system with a user-pay system. I wonder if they’ll agree when they figure out that online ad rates aren’t going to rise to meet broadcast/cable rates, rather broadcast/cable rates collapse to online price points.
It’s free now. Hulu is not changing the way it’s paid for.. Just the way it’s distributed. Hulu’s current schema has a chance to make tons more money. The commercials pay for it. They have always paid for it. But now they will pay more for it. They will get more out of it too. Because once again.. you will be watching them .. instead of skipping them. Who watches commercials on Television anyway.. I have a DVR.. that was so last decade.. CBS only has Big Bang and How I Met.. other than that.. if they want to fight this battle. So be it.. I think we can just nick name them HD-DVD.. yeah.. that sounds good.
The Fuzz
I want Hulu in Media Center. Then I won’t care anymore.
They do have a desktop app. Works pretty well.
Oh well, no big loss for me. There isn’t a single show on CBS I would actually consider watching.
Beyond that, this is just another old guy in a suit who doesn’t get it and will be left behind. The networks that embrace technology and what consumers actually want will survive long term.
Its all about money.
The cable companies are complaining about bandwidth just because they are afraid of IPTV even when the data shows they are making money hand over fist and are lying about the technical details. And now the TV networks are upset about IPTV because they are afraid they won’t have an iron grip over the market place and will become insignificant if they continue to produce the crap that we have to put up with on broadcast and cable. I say let them do what they want and die because of their stupidity.
I purchased a Mac Mini and run plex media center for my TV needs and have dumped my cable. Not only do I get to watch good content I can watch it on my terms.
If you don’t like their terms dump them. Drop your cable. Stop watching broadcast TV. Perhaps when their cash machine stops dumping out their multimillion dollar salaries then they might get a clue about what we want.
Hello? There are COMMERCIALS in Hulu content.
I must be missing something. What the hell more do people like “Quincy” want from people?
Maybe Quincy can figure out something entertaining for people whoa are SICK of “CSI” and “Survivor”?
Oh my god, something about Nature, perhaps? A documentary? A move? Something fucking interesting maybe?
I love Hulu. I stopped watching TV a long time ago, then I started to download shows on iTunes Store, then Hulu came and I dropped iTunes Store too. Quincy, wake up. Hulu is doing it right. Heck, I hate to say this but I would not mind being subjected to micropayment subscriptions to access premium shows on Hulu in the future, as long as they air at the same time as cable. Also, I would like them to make their native app simpler to use, Ã la Apple TV. Right now, the flow is kinda confusing. Cheers!
Also, Hulu should replicate their model in foreign markets pronto. That would rock.
Unfortunately, companies like Hulu are going to have to put up with people like Quincy for a while. Ultimately, content providers have an edge in this game.
That said, I echo the sentiments of many here. I watch episodes on Hulu every single day, I love the fact that the ads are shorter BUT I remember more of them than I possibly could with TV ads. I can tell you all about Lauren’s HP DV7 with Windows and how she’s still a PC or the Nissan Cube and the young hipsters in it (if only I could position my mouse quickly enough to click on the link embedded in the commercial).
I cannot imagine why people don’t see what I see, the time on Hulu is worth SO much more than time on TV for commercials. I can’t change the channel, that in itself should be worth a few bucks.
Hi,
The interesting thing is how, before Hulu, everyone thought armegedon was about to arrive for the tv world with BitTorrent stories regularly and the mainstream being educated on how to access it.
Hulu launches, the networks make their inventory available, and most [normal] consumers are not only happy with what’s now legally available to them, but are willing to accept a few more monetisation efforts.
Quincy Smith might also be thinking about placating content producers/owners beyond being just a network man, in the position of owning tv.com and last.fm, and positioning to show the incumbent players (those behind TV Everywhere) that it’s better aligned with their interests as a direct competitor to Hulu and partner to them.
Yours kindly,
Shakir Razak
Maybe CBS should spend more time getting its own content online, than WHATEVER else they’re doing.
They’ve got a fantastic sitcom, about a group of 4 guys who are EXACTLY the kind of people that would watch their favorite CBS shows online (and their cute blond neighbor)… and BIG BANG THEORY ISN’T AVAILABLE ONLINE! I dig that MacGuyver is available, and some other random stuff… but why the F isn’t Big Bang Theory available in full episodes?
You’d THINK Sheldon would be throwing a hissy fit about this kind of thing
Leaked CBS exec memo shows they don’t get that Hulu is about winning the BRAND game, not the revenue / rankings game. Brand is most valuable asset online. Would expect more from Smith and Soohoo.
Hey Erick, you mis-spelled Rupert Murdoch’s name.
Hulu envy anybody ?? I think NBC/Fox’s Hulu was in discussion with CBS and ABC and once ABC joined the project, CBS people don’t know what to do with themselves, they have been left out in the cold. The only thing comforting is the lousy show lineup NBC has.
What? Your theory is that your duaghter leaving your doors unlocked and letting people coming into your house and taking whatever they please is a sign of recklessness on the part of your duaghter?
I haven’t had cable TV for about 5 years and no broadcast antennae works where I live. Hulu is my source of TV. I love it. CBS is boring. The CBS brand reminds me of things like the Pacer and Gremlin autos. I think my grandma watches CBS. TV.com makes me think of TV Guide, and I haven’t seen one of those since the 1970s. Quincy seems like some empty suit surrounded by consultants who are just working him for more hours, or recent college graduates from DeVry trying to fill up their resumes.
My primary use of Hulu is for shows on cable channels I do not receive (USA and SyFy (god, I hate that change from SciFi)), or for conflicts in scheduling for shows I’m interested in watching. The last thing broadcast TV should do is tie itself to the cable companies, because they’ve proven they’re not going to change their ’screw the consumer’ approach to business.
CBS is also a perfect example of how they screw up broadcast programming. This year I was watching something else besides CSI:Miami, and planned to catch it when the rerun season began. What does CBS do, they go with reruns from 2008 instead of the latest season. One potential viewer gone.
Hulu is not perfect yet, but it really is the future for entertainment.
This is disappointing and stirs up lots of unnecessarily combative discourse.
I have to be careful about this comment because I really like CBS Interactive and I also really like Hulu.
However…
I think I understand their core financial imperatives, yet I think there has been something lost in terms of focus on consumers and on who pays the bills. First of all… it is not advertisers. These brands are soliciting business from consumers. So consumers must be the focal point. If the perfect ad message comes to a consumer in an unacceptable bargain (expensive or burdensome or insulting) the message fails and the whole ecosystem of the advertising value chain will collapse. Plus, brands get damaged– meaning everyone including content production company and delivery network. This is all about soap, mind you. Not about Jack Benny.
So my concern with TV Anywhere and the insistence by *some* in the industry that *all* or *most* content should be paid w/subscriptions or per-view or authentication misses a huge point.
The point is that ad revenues are just too low to support the legacy model of “free” ad-supported content. We see the “fix” to this problem not in devising new ways to get end-users to part with enough money to bridge the shortfall so they can continue to enjoy the content. We think that’s lazy and insulting to consumers, and as an industry we can surely do better. Although we have some pretty good ideas about that.
Rather, we see the solution in working to get better at ad campaign targeting and overall ad effectiveness, to raise these ad rates to the point where content creators (CBS and others) can see their way to a “fair” return for their investment in the content. It’s as simple as that. Yet sadly not very well executed in the marketplace today.
So at EyeTMedia we are working to provide the targeting, benchmarking, tools and reporting to help all boats rise with this tide. We think that’s a better solution than putting artificial barriers in front of consumers, or devolving into some passive-aggressive consumer-versus-production company/network/MSO path, which would be both destructive and hugely distracting.
Consumers rule. We all work for them. They pay the bills in their response to ad messages from the brands who pay for the advertising. Cablers/MSOs are one path, and a good one for their time, and we think should have a role going forward A role. Not total control. And not the only answer. Internet-delivered is another path. Carriage and bulk-ad upfronts and cross subsidies are anachronistic and are contributing to the confusion as to who makes money and where are the profits going.
If we move to authentication and TV Anywhere many of us see the end to MSO’s ability to fight-off a-la-carte TV, which would be somewhat more consumer-friendly but would create huge disruptions of its own, and may still end up “feeling” anti-consumer. Perhaps even more expensive to consumers in many cases, and a huge revenue gap for content producers in other areas (perhaps overdue in a few areas). In the end this may stifle innovation in creative work, or on the other hand it might stimulate a shift towards a more egalitarian performance-based accountability for more quality in highly-produced works. No answers for that yet. But lots of risk. And to be honest, still lots of schlock (that’s a technical term) that inexplicably gets produced, and often cross-subsidized in bulk ad deals at the upfronts and in carriage contracts. This is a dysfunctional holdover that may be extinguished in this round of creative destruction.
At EyeTMedia we are all in favor of content owners earning a respectable return on their investment in making this terrific (mostly- see above) content. By increasing ad rates and campaign effectiveness around entertainment content, we can enable them to be more experimental and more “open” in their efforts to be accountable to their shareholders and stakeholders. They need to make money and we need to keep them in business to bring us quality entertainment (again see above–mostly quality).
But we do not owe the existing value chain and delivery network anything. Incumbents, like all the new entrants, need to earn their way as they go. They should have no bully-pulpit or “first mover” advantage engineered into the system. This may require them to partially re-invent themselves and get a bit closer to the consumer.
This is may seem radical and disruptive to some, and regressive and narrow to others. But in the end, this path recognizes who the “real” customer is— Again, let’s not forget that we all, including content creators, work for the consumers, and are paid by the advertisers (who also “work for” the consumers via their accountability to the brands).
Content, Control and Community. That is how we make this possible.
Only by ensuring the free flowing access to content within an experience that includes all three will the ad rates move upwards in the online experience to remove the fear and uncertainty that has spawned these other, less palatable (to consumers) options being suggested.
Keep up the great reporting, and let’s focus less on vilifying those speaking about these issues and more on understanding why the stakeholders in their organizations are asking for “options” to boost fair return on investment.
We’ve got to get the conversation advanced to the point where both sides see the issue in the context of the consumer. One side must not screaming for the right to free content. The other side must not advocate for the right to built-in profits “just because they were there first.” We see a reasonable and symbiotic relationship, but only with the consumer squarely in the center.
Enjoy the weekend. My DVR is full of this week’s series debuts. Pity there is not a way to get that content in an organized package (with ad targeting that is personalized) to me on my laptop at my hotel during my upcoming trip, or on my iPhone without spending hours geeking-out. Stay tuned. That’s what we enable publishers to do, while massively improving consumer ad experience, response and control.
Remember, Content, Control and Community.
Cheers,
Matt Weeks
CEO, EyeTMedia, Inc.
mweeks@eyetmedia.com
Hulu is the Comcast of the future. By that, I mean they hate their own customers, overcharge for everything, and provide horrible customer service…