A few months ago, I gave a presentation on “Video on the Web” as part of the University of Quirk initiative. The university initiative gives each QuirkStar the opportunity to present a chosen topic in front of their colleagues, ultimately furthering each Star's understanding and knowledge of the Internet.
The final part of my presentation included a view of the future of video on the Internet, or to be more specific the emergence of Hulu as a premium video service.
In my presentation, I discussed how TV and cable companies are where newspapers were 5 years ago - in denial! Most of these companies were built on marketing models and principles that have been successful for them over the last 50 years. However, a lot has changed in the last 10 years that has made these models obsolete and led to them struggle. Below I have discussed the most striking points:
TV business models for the past half-century, from broadcast to cable to satellite, have been built on the following foundations:
- Not much else to do at home that's as simple and fun as TV
- No way to get video content other than via TV
- No options other than TV for advertisers who want to tell video stories
- No options other than cable - and, more recently, satellite - to get TV
And now, slowly but surely, look what's happening:
- Other simple and fun options emerging at home: Internet, video games, Facebook, IM, DVDs
- New ways to get TV content other than traditional TV companies: Hulu, YouTube, iTunes
- Video-story options for advertisers beginning to emerge: Hulu shows, for example
As you can see from the above comparison, TV and cable companies are in hot water and most of them have yet to come up with a plan to save themselves from drowning. I say most, as there are a few companies (ABC, NBC, NEWS corp and possibly soon Disney) that have been smart and taken Amazon music’s failure to launch a music platform against the iTunes store as an example of missed business opportunity.
Hulu’s reach as a video platform keeps growing, now reaching more video viewers than the second biggest U.S. cable company. Translation: Hulu has more viewers than Time Warner Cable. With figures released showing Hulu’s July unique visitor count soar to 38 million.
If this is not sending warning signals to TV and cable companies I don’t know what will. We’ve seen in the past how the Internet changes the way we perceive and consume media. This change became mainstream in the late 1990’s with Napster and the ease of sharing music. Now, video is coming into its own and companies like Hulu have taken advances to make themselves the broadcasting giants of the 21st century.
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