
A Brief Intro…
I started this three-part series with a discussion of “the new creativity” and asked if the freemium business model would be better for video content sites like Hulu. Then, I outlined 7 ways Hulu could benefit from a freemium model.
And finally, after all of this persuasive writing, I’d like to examine how a few boneheaded marketers will probably f*ck up the whole “free video content” thing for everyone.
Intrigued? I thought so. Let’s get into it.
They’ll Never Pay For It. Until They Do.
In my last post, I outlined a plan where Hulu could profit by packaging some already- (or mostly-) existing assets into an awesome premium package some viewers would gladly pay for.
Hulu would be happy because they’d be making money. Their free audience would be happy because they’d still get great shows for zilch. And their premium audience would be happy because they’d get a bunch of perks and cool stuff for a nominal fee.
You’d think everyone would be happy, right?
Peter Verna, senior analyst with eMarketer is pessimistic that these perks could be bundled together into a premium package. He was quoted in a November OMMA article, “Trim Marks“:
“It’s fair to say that consumers are generally not willing to pay directly for online video…
I also think that if Hulu and YouTube are going to start charging for some of their content, they should limit it to feature films. Virtually everything else they offer seems to work better in an ad-supported context, with the caveat that user-generated clips are challenging to monetize through any model.”
True, most of the examples in “Trim Marks” were from digital studios creating original content. But comments like Verna’s certainly apply to sites like Hulu and the lessons ought to be applied to any website specializing in video content. The history of online video over the past 10 years or so would support his notion that people generally won’t pay for online content.
My point is that premium customers aren’t paying for online video. They’re paying for more flexibility. They’re paying for the ability to suggest shows or brag to their friends. They are paying for a better user experience.
A Lonely Voice Crying Out From The Wilderness
Of course, not all agencies are going to challenge their clients to try new business models. Many are happy to pretend the world isn’t changing.
In that same OMMA article, John McCarus, VP and director of brand content at Third Act, said “We have made an investment in this and we are doing everything we can to connect the stars in the content-creation community with clients that understand the space and have an appetite.”
OK, that’s McCarus’ idea, but will this sit well with content creators? Isn’t this the definition of selling out? If online trust is built through honesty, sincerity, and reputation, I don’t see how this will work long-term. Sure, one-offs will flock to it, but creators looking to connect will likely shy away from this business model.
But the suits go ever further! Studios need to “make room for advertisers to play an active role in the shape of a show,” says Alan Schulman, executive creative director for The Digital Innovations Group.
Are you friggin’ kidding me? So instead of advertising against content, they will dictate the content as well?
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