Viewers who stream network TV shows may soon discover the free ride is not so free.Their content?
Hulu, which attracted 31 million unique users in March under a free-for-all model, is taking its first steps to change to a model where viewers will have to prove they are a pay-TV customer to watch their favorite shows, sources tell The Post.
In fact, the move by Hulu toward the new model — called authentication because viewers would have to log in with their cable or satellite TV account number — was behind the move last week by Providence Equity Partners to cash out of Hulu after five years, these sources said.
And it’s not just Hulu making it tougher for cable-cutters to stream shows and other content.
Fox, owned by News Corp., which also owns The Post, is expected to begin talks soon with Comcast on a TV Everywhere deal that will require authentication. Plus, Philadelphia-based Comcast is expected to switch to an authentication model for this summer’s Olympic Games (see story at right).
The move toward authentication is fueled by cable companies and networks looking to protect and profit from their content.
With all due respect to the fine gentlemen at Comcast, about the only work of convincing fiction that they produce are their own advertisements.
It also appears to be a violation of their agreement that the FCC required for the NBC/Comcast merger:
"The Federal Communications Commission (FCC) was asked to include as a condition of Comcast's takeover of NBCU that subscription to a pay-TV service not be required for access to Hulu," said Public Knowledge President Gigi Sohn. "It is a shame the Commission declined to do so."what is going on here is that they are killing the business in order to maintain control.
Free Press saw it differently. "This sudden move to big cable's preferred business model raises serious questions about whether Comcast is violating the conditions of its merger with NBCUniversal," said the group, "a deal that gave the company a large ownership stake in Hulu." As a condition for approval of the merger, the cable giant agreed to relinquish any right "to influence, control or participate in the governance or management of Hulu."
"Where there's smoke, there's fire," said Free Press Policy Director Matt Wood, "or at least a compelling reason to investigate. Under the terms of its acquisition of NBCUniversal, Comcast is forbidden from influencing Hulu's operations. Today's announcement looks an awful lot like an example of such influence."
In the short run, it may make sense, since this allows them to maintain their monopoly rents on their subscribers, for a while at least.
One of thei early investors, however, bailed out on Hulu:
Hulu.com owners Walt Disney Co. (DIS), Comcast Corp. and News Corp. (NWSA) are close to buying out Providence Equity Partners Inc.’s stake at a price valuing the company at about $2 billion, said two people with knowledge of the matter.It ain't the time frame, it's that their interest is in the success of Hulu, and not of the cable companies, and they realized that the management is the cable companies' moles.
Providence is selling its 10 percent share in Los Angeles- based Hulu for about $200 million after investing $100 million when the venture began in 2007, according to the people, who weren’t authorized to talk publicly.
“This would be the optimal outcome,” David Bank, an analyst at RBC Capital Markets in New York, said in an interview. “The real value of Hulu will be discovered on a longer time frame than what’s likely optimal for Providence.”
Truth be told, except for the wonderful Alec Baldwin brain sucker ads, this does not really effect me, but it's seriously galling.