Tuesday, October 30, 2007

NBC admits: Hulu is designed to gouge cash from viewers

It's always been hanging in the air, of course, but as NBC/Fox's Hulu service finally dribbles into private beta mode, it's refreshing to see a senior NBC executive admit that the whole point of Hulu is to do little more than to try and extract more money from consumers.

The network's Chief Executive Jeff Zucker told a breakfast meeting:

that it was “a relatively easy decision” for NBC to walk away from the Apple download service because it had only earned about $15 million from the service last year in spite of accounting for about 40 per cent of the videos sold on the store.

He said NBC routinely propositioned Apple to breach its standard pricing model and experiment with higher pricing for one hit show such as “Heroes” by raising the price from the iTunes standard $1.99 to $2.99 on a trial basis.

“We wanted to take one show, it didn’t matter which one it was, and experiment and sell it for $2.99,” he said. “We made that offer for months and they said no.”

In other words: the only reason why Hulu exists is because NBC doesn't like you getting your video for a a price it can't dictate. $2.99 isn't a pricepoint that would be achieved in a free market; NBC is trying to create a monopoly. And for that reason alone, we should all hope Hulu flops.


Anonymous said...

The anti-monopoly sentiment is why I hope the PS3/Blu Ray flops.

Anonymous said...

Slightly off-topic but... Blu-ray players are available from a bunch of manufacturers, not just Sony. And the technology's better, holds a lot more data. HD DVD players contain Microsoft proprietary technology - now that's a company who know how to run a monopoly. Shame they don't know how to build hardware - a billion dollars set aside so far to fix faulty Xbox 360s!

achong hok lian said...

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