Posts Tagged ‘online videos’

Hulu LLC announced the imminent launch of a subscriber version earlier this month and has started accepting requests for a preview version of the service, Hulu Plus. “Plus” is a $10/month service that adds older television content to the new episodes already available at hulu.com. The large television conglomerates that co-own Hulu have hinted at such a move since October, without giving a specific timetable for its launch.

We at F3 Technologies see Hulu’s move as confirmation of the general viability of fee-based online video, including our own FargoTube platform. Americans are spending more and more of their time on the internet, and content owners should treat the internet as a source of revenue to take the place of dwindling television viewership and album sales. Hulu, YouTube, musicians, newspapers and countless other media companies have been giving away their creations free of charge for years, and Hulu Plus is an acknowledgement that the free model isn’t sustainable, at least not by itself.

Several aspects of Hulu Plus underscore FargoTube’s advantages for television studios and especially for other content owners.

For one, FargoTube allows content owners to post their videos without advertising, an important choice for owners who believe an ad-free environment facilitates stronger connection with fans. Content owners who do allow advertising typically reap half or more of the ad revenue that FargoTube collects. That’s comparable to what Hulu now collects, based on an estimate by the New York Times in March. Hulu hasn’t said how much of the subscription fees it will share with content owners (Hulu LLC itself is 90 percent-owned by three television companies: NBC-Universal, ABC-Disney and News Corporation, owner of the FX Channel and Fox News Channel). FargoTube shares more than half of subscription revenue with content owners.

Although navigating Hulu may be a bit easier than a DVR/television combo, and though picture quality may be somewhat inferior (Hulu Plus is supposed to feature higher definition), it’s basically the same as TV: a one-way medium that the viewer sits back and watches.

FargoTube is interactive, with video as the center of a social network that we call a “tube”: Viewers can e-mail each other and post comments while watching. They can create networks of online friends with similar entertainmnent interests. They can subscribe to one tube or more than one, or pay a one-time fee for a single video, depending on how the tube owner wants to integrate FargoTube with the rest of his or her online presence. Unlike Hulu and YouTube, FargoTube is primarily a behind-the-scenes solution for owners to monetize their content while maintaining direct contact with viewers and fans. The direct contact allows tube owners to better understand their fans’ buying habits, and to promote other business lines, such as concerts, in-theater premiers, and online sales of merchandise like t-shirts and car accessories.

Financial analysts and tech bloggers have been mostly positive about Hulu Plus.

“They are offering a hybrid approach which I think leverages the Web — some content is free and supported by ads and some content will be paid,” consultant Michael Vorhaus, who has studied online pay models for networks and newspapers, told the New York Times.

Bruce Leichtman of the Leichtman Research Group told the newspaper that he sees “not a lot of interest in paying for Hulu.”

At ITWorld, Peter Smith theorized that Hulu might come up with a Hulu Plus Plus with a higher subscription fee and no advertising at all. The company told him it’s not ruling out such an option.

If people don’t end up being willing to pay for either new option, it may be because they can already get the same or similar television programs free of charge — both on television and online. FargoTube’s situation is a bit different, however: Most of our clients and potential clients are smaller than the giant TV studios. They’ve built up fan bases outside the mass media, and we believe those fans are willing and eager to pay for access to new and original content.