Rumor has it that Hulu is planning to link its membership to a cable subscription.
That's right. In order to use Hulu, you would need to have a relationship with a cable provider.
This idea is so backward and so wrong on so many levels, but the fact is, even if it were to succeed, the streaming trends driving cable's disruption aren't going to slow down.
Now, rumors are rumors. I get that. And the original source of this one appears to be the New York Post, the New York City tabloid that makes its money writing sensational headlines that get people riled up.
(Hulu had not responded to a request for confirmation or denial of the rumor at press time.)
But for argument's sake (because that's why we're here, after all), let's assume there's at least a hint of truth to this and talk about why it's such a horrible idea.
Hulu is a streaming media service owned by several media entities, including Fox, Disney-ABC, and NBC-Universal (which is owned by cable service provider Comcast).
Interestingly enough, when Comcast bought NBC-Universal it was with the stipulation that it couldn't make any strategic decisions about Hulu or its future. It sounds from this kind of suggestion that Comcast might not be taking that stipulation terribly seriously.
In fact, according to a January 2011 blog post in the LA Times, the Justice Department at the time had some serious reservations about the Comcast-NBC deal. Quoting the Times piece:
In court filings Tuesday, the U.S. Justice Department explained the challenge that Hulu presented: "Comcast has an incentive to prevent Hulu from becoming an even more attractive avenue for viewing video programming because Hulu would then exert increased competitive pressure on Comcast’s cable business..."
Exactly. And yet the government allowed the deal to go through anyway. Now we have a big cable company trying to protect its turf in every way possible, recognizing quite rightly that services like Hulu and Netflix represent a real threat. People are beginning to cut the cord and cable companies like Comcast are seeing the handwriting on the wall.
So, what to do about it? Well, in the tradition of all disrupted industries, Comcast decided to take control of the one service it has some influence on and tie it to the disrupted model. Brilliant, right? If you want Hulu, you need to buy cable, too. But what Comcast doesn’t seem to understand is that if you have Hulu, you might not need cable anymore. You may instead buy a few services like Hulu, Netflix, and Amazon Prime -- and drop cable. And you should have the right to do that.
Hulu is a great service for a number of reasons, but content is of paramount importance: It has good current shows, innovative original programming, and some decent movies.
But Comcast is actually undermining the content side of Hulu's business with this requirement -- and the content business of NBC Universal along with it -- because it is putting the cable delivery side of the business ahead of the content creation/selling side of it. NBC-Universal and the other media companies that own Hulu spend lots of money creating content, and they distribute that content in a number of ways, including on their networks and via Hulu and other streaming services.
If a new streaming service came along, one without the same link to a cable TV subscription, and it put in a fat bid for Hulu or NBC-Universal content, it would be irresponsible for Hulu’s content owners to turn it down. Yet at the same time, it would actually leave Hulu at a competitive disadvantage because of the forced cable-subscription link.
The conflicts are mind-boggling -- and they are not going away, because the future is not in delivery over cable. It's in streaming on computers, tablets, mobile devices, and to TVs, either directly or through boxes like Roku and Apple TV. Comcast can try to stall this trend with gimmicks like tying streaming services to cable subscriptions, but in the end it's a band-aid solution for a dying business model. There's really nothing Comcast can do to stop it, no matter how hard it tries.
— Ron Miller is a freelance technology journalist, blogger, FierceContentManagement editor, and contributing editor at EContent magazine.