I challenged Tom Green on his subscription model at the Digitas Newfront event. Although I don’t see much of a market for $5-$10 monthly fees for a specific destination, I liked his answer. He doesn’t want a huge audience. He wants a tight 100K loyal audience of subscribers. Of course it will take a long time to get 10K much less 100K people subscribing. Even Howard Stern lost the majority of his audience when he moved to Sirius.
Now here’s an article that suggests at least one Hulu content provider would like to charge. There are three reasons I don’t see this as attractive as ad-supported (or better yet, sponsored branded entertainment) in the next couple years. Think back years ago when newspapers moved online. How many, save the WSJ, would have had popular websites had they charged from the beginning? Few.
I’ve always said the only content I’d pay for might be The Onion, but I’m not sure. I don’t subscribe to the newspaper. But I love the videos.
Why do I not believe pay-per-view and online video are ready to meet in the next 12-24 months?
- First, there’s not an easy way to buy. Unlike iTunes, which provides me with an easy way to buy TV shows from my bed, Hulu views are mostly on the computer and in low resolution. And unless Hulu persuaded viewers to pay, and became the “Visa” or “PayPal” of online-video subscriptions or purchases, it’s unreasonable to expect many people to pay in the near-term unless it’s high resolution and available for TV and remote viewing.
- Second, this represents a “shot over the bow” of cable providers. The cable companies are not going to be happy about individual networks circumventing them and allowing people to purchase ala cart. It’s a big threat to cable’s bloated monthly costs.
- Third, the market is too small and new. I’d advise Killar and other destination CEOs to continue looking for creative ways to charge advertising premiums, and maybe pilot selective micro payments for incredibly popular content (assuming they could make it higher resolution, exclusively pay, and available for TV viewing without cable conflicts.
I’ve bought more television shows on iTunes in the past 6 months than I’ve ever paid for DVDs or premium cable services. But again- that’s easy, high quality, and I’ve only got to have a credit card on file with one company. More importantly, I don’t pay a subscription fee, so I buy pilots of shows to see if I want to watch more. I’d advise iTunes to offer free/discount pilots to get new audiences hooked on shows. I bought almost the entire history of Lost during the time I was on back surgery, and felt it was a fair price.