Great article by Optimedia US CEO, Antony Young

Saw this over the weekend and thought it was worth passing on.

Optimedia US CEO Antony Young has written a piece claiming ‘Hulu is an H-Bomb Ready to Destroy the TV Industry’. And he might be right.

No one is questioning that Hulu is a great product, as a user … but commercially it could pose some real problems to those involved reasonably soon.

Young’s article looks at a few key factors that are often used by those who are involved in these ventures.

1/ If we don’t do it, someone else will

2/ Consumers want it, hence we have to give it to them

3/ It will ultimately increase TV audiences

I like his closing quote “As a media buyer, I have no vested interest in whether the broadcaster shareholders support Hulu or not. Our livelihood as an agency relies neither on supporting the status quo of traditional media nor blindly pushing the popular wisdom of digital everything.”

One thing that is interesting is the comments are all very dismissive of Young’s view. Which is kind of sad as he makes sense and in a way it shows how far away from commercially competent many involved in digital are. I think many of these comments are a result of those making them not understanding the cost realities of creating content and the revenue performance of broadcast TV.


4 responses to “Great article by Optimedia US CEO, Antony Young

  1. It is not a million miles away from the music industry challenge.

    The shows on hulu are often downloaded via torrents or other free services.

    Hulu presents an opportunity for the networks to get ‘some’ revenue from the download phenomenon.

    Suggesting that the networks simply do not run projects like this is an investment in protectionism which NEVER works.

  2. talkingdigital

    I don’t envy the challenge they face but I think there’s better ways to build businesses by giving everything away.

    Ultimately Hulu etc and video generally will see CPMs pushed down more on par with TV now … which will make it even tougher.

    That said, maybe I’m missing the point and in a few years will be proven wrong

    Good to see you back Liam!

  3. I think the point I am making may be better summed up as “tough”.

    People are consuming television in different ways. Downloading is very tough to stop. Sharing whole series is very hard to stop.

    It is better to make some money from this segment than no money.

    This doesnt stop theft but as we have seen with music some people will pay. Whether that be ethics or convenience or fear, some will pay.

    Hulu addresses those folk. Not launching doesnt help anybody.

  4. I agree it is a great thought-provoking article Ben.

    However, when I ask myself the question do I think that the day will come that long-form video streaming online a la TV will come, the answer is “Yes”. Therefore, if I was broadcaster I would want to be playing in this ballpark!

    The trick is to have that presence without canabalising your existing (premium ad dollars) audience, and I’m pretty sure that no-one has cracked that model yet.

    To pick up Liam’s point about the music industry, I think that there IS a difference. Music has always been a “people’s medium”. That is, young punks have been thrashing away in garages for decades making music, and some of them become famous and make squillions. (I’m not going to get into the argument of who makes more millions – the artist or the record label). So, I see music as a great democratisation of popular particpatory culture. Also, “making music” is pretty cheap. Always has been and always will be (until the labels get involved but that really is marketing money driving up the cost). This is partially because music is traditionally ‘short-form’ – the 3-minute pop song.

    Video or TV production always has been pretty pricey. And even in this digital age it still is. For example, my wife’s latest TV animation is 26 x 30′ episodes showing locally at the moment (no, I’m NOT going to plug it any further) didn’t have much change out of$9m!

    My oint is that the cost of broadcast quality video is huge. It is also predominantly long-form.

    Given the ‘race-to-the bottom’ in terms of cost that the Internet seems to be predicated on and if this continues, there will be insufficient funds to drive the insatiable appetite for free content that is of quality, OR, revenue models that generate the funds will spring up. Murdoch’s intention to charge for his journalistic content is just the first of what I believe is a path that MANY will travel in all sorts of content – news, music, video. The key is the reach of the Internet will mean that micro-payments will be sufficient to provide these funds. If this doesn’t happen we will be condemned to watching videos of cats on keyboards … and my wife will be looking for a new career!

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