We reported earlier in the year that leading US online catch-up TV service HULU had applied for registration of its trademark in Australia, fuelling speculation of an Australian launch of the service some time in the near future.
HULU is jointly owned by US media companies NBC Universal (Comcast), News Corporation & The Walt Disney Company and has around 260 partners providing content. The online catch-up service has been a break out success in the US delivering leading US TV shows to online audiences shortly after network or cable broadcast. It also offers the best of Hollywood movies. The service is delivered via a subscription and/or advertiser-based model (depending on which territory the user resides in) across a multitude of platforms, including PC, iOS devices and through Sony’s Playstation 3 or Microsoft’s XBOX 360.
FrostGlobal Editor-in-Chief Byron Frost was recently in Japan, where HULU is available. HULU Japan was launched in September this year and Frost Global was able to test drive HULU across a number of platforms including PC, Apple’s iPhone 4 and iPad. Whilst the service in Japan currently has limited fresh content and relies heavily on US back catalogue content such as Prison Break and 24, there are promises to bring fresher content both from Japanese and Korean content providers as well as US content where rights allow.
HULU is available to those living in Japan for around A$20 a month which allows a user ad-free, unlimited streaming of content (of course one must keep in mind ISP download limits). The system also enables a user to pause a program on one device halfway-in and then resume watching the program from the paused location on another device. The quality of the streaming is also very high on all devices (at least using a Japanese Internet connection), and from an iOS perspective the service runs extremely smoothly with minimum lag. Content is especially a joy to watch on an iPad. We rate the service very highly save for the current lack of fresh content.
This brings us on to the question of whether HULU will ever launch in Australia? The difficulty is that Australia’s Free-To-Air networks have long term supply deals with US studios and are unlikely to relinquish their rights over this exclusive content to a competitor brand. Probably even more of a road block is that each network has there own catch-up tv service offering.
Mark Scott, Managing Director of the Australian Broadcasting Corporation recently noted the failure of the networks to work together on a catchup service. He said in an address to the 2011 Walkley Media Conference in Brisbane last month,
“…internet programming will increasingly be received and experienced as television – on a big home screen or a mobile one…I think it’s disappointing that to date, Australian free-to-air television networks have not been able to work together to create a local version of Hulu [emphasis added] - a place were so much of what is on television is available for catch-up and personalised programming where it is available.”
FrostGlobal reported last year on the UK’s Youview where all major UK television networks are participating in a the joint catch-up service despite the dominance of the BBC iPlayer, which recently launched in Australia on a subscription model. A summary video of the Youview service can be seen below.
In Australia, there are a variety of TV catch-up services including iView, Plus!7, FixPlay, along with SBS’s and TEN’s own offerings. FOXTEL also recently announced a new FOXTEL on-demand service. The problem with the FTA networks’ offerings is that there is no consistency between the services. For example, iView and Plus!7 can be viewed online or through a PS3, whilst FixPlay is available through the NineMSN website. Whilst these services are good products in their own right, collectively they are confusing and lack the strong brand reputation (aside from iView) that is capable of taking a sizeable share of an ever fragmenting audience. This is especially the case as new competitors are coming to market all the time, whether it be Telstra’s T-BOX, Fetch-TV or Quickflix.
As Mark Scott told the Walkley Media Conference,
“With free-to-air currently holding a market share of more than 80% of primetime TV viewing…it would have been a great defensive play for when a Hulu actually lands here to offer seamless broadband viewing with fresh and archival global content. And defensive against the deep pocketed ambitions of a Foxtel, backed by Telstra an a few other significant household names in Australia’s media.”
The FTA networks successfully established Freeview to cooperate in promoting the FTA platform and their new digital stations, to the point that there is 92% digital TV penetration across the five mainland capital cities. In 2008 (before Freeview was launched) only 28% of Australian households had Digital TV.
Recent years have also witnessed the success of iTunes (as a one-stop shop for content from multiple content providers) in delivering content to consumers, but that is only one model, a pay-per-click model. Whereas the network catch-up offerings are advertiser funded, with the exception of the ABC’s iView.
HULU offers a proven subscription/advertiser funded model. If the networks were prepared to work together to supply content to HULU this could ensure the FTA networks are making available their content to as many consumers as possible, on as many platforms and therefore hopefully reducing the rate of digital piracy.
Could HULU also adapt to local market conditions by offering the FTA networks dual watermarking/branding (e.g. Seven’s watermark appearing with the HULU watermark on Seven content)? Alternatively the networks could be offered in-program pull-throughs or advertising at the start and end of a program to remind viewers of when the program is available to watch on FTA. No doubt revenue sharing would also be apart of any such agreement. The networks already have strong relationships with the major US studios and because HULU is owned by these major studios there appears to be a ripe opportunity to build on those relationships.
HULU is a ready made platform to make catch-up viewing even more simple across a multitude of platforms. The framework already exists. However it seems that unless the networks are willing to work together, and manage their existing relationships with MSN and Yahoo or other online partners, Australians will be waiting a long time before HULU Down Under becomes a reality.
Whilst free-to-air remains the main game for advertising revenue, audiences are beginning to fragment and in order for the free-to-air networks to capitalise on the growing online catch-up audience HULU or a similar united catch-up service is needed for the Australian market.