Its Hulu’s time to shine Down Under

FrostGlobal reported earlier this month that Hulu’s shareholders 21st Century Fox, NBCU and the Walt Disney Company had decided to take Hulu off-the-market and inject US$750 million of new capital into the company.  At the time of the announcement, Disney’s Chairman and CEO Robert A. Iger, said:

“Hulu has emerged as one of the most consumer friendly, technologically innovative viewing platforms in the digital era.  As its evolution continues, Disney and its partners are committing resources to enable Hulu to achieve its maximum potential [emphasis added].”

It is clear from this announcement that Hulu’s owners want to see the online video platform grow.  It currently has 4 million paying subscribers and more than 30 million unique visitors each month.

The question for Australian consumers is whether they are in Hulu’s growth plans. Many have hoped that Hulu or similar services such as Netflix would open an Aussie outpost.  However, to date they have not. The online catch-up TV market in Australia is void of a one-stop-shop for television and film content from multiple content suppliers.  As it stands, Australia has a very fragmented market.  For example, each major metropolitan free-to-air TV network and subscription-TV provider Foxtel have their own catch-up TV service, e.g. Foxtel On-demand, Plus7 or ABC’s iView.  Bigpond and Quickflix also offer online catch-up TV services.  While these online services are good, they pale in comparison to the consumer offering that a Hulu or Netflix can offer US-based customers. For example, Hulu sources content from over 400 content partners (including the major US film and television studios).

It is not only the amount of content that is legally available online to US consumers, but also the accessibility of such content.  Freelance journalist Adam Turner highlighted this on in an article about Google’s new Chromecast.  He wrote,

“Americans really are spoiled for choice when it comes to internet video. Services like Netflix, Hulu and Amazon Instant Video are built into almost every new television, Blu-ray player and games console…Here in Australia you’re lucky to find a TV with Quickflix or Bigpond Movies built-in…The idea of watching anything from any device is still a pipe dream in this country.”

We have seen Network Ten begin promoting its new “Anywhere. Anytime. TV as it should be” proposition. While Ten’s new strategy is an exciting development, unfortunately it is unlikely to offer Australian consumers with the same content access options as US consumers. That is, a large scale content-owner neutral platform (like Hulu or Netflix).  No one is saying that iView or other similar offerings are not a good product, but like with the other media companies in Australia, online catch-up content is largely locked in network silos.

To assist with a reduction in digital piracy rates and so that television networks can maximise revenue in the digital environment, they need to work together and create a content-owner neutral platform for consumers to access the best content from around the world (whether using an advertiser-funded or subscription model).  The FTA networks already work together under the freeview banner – is creating a unified online catch-up option a step to far?

While one acknowledges that a joint catch-up service would lessen the branding a network could place around its content, the cost of not acting together is the potential loss of viewers as consumers are confused as to what service each network offers and what devices work with each offering.  This is why Australian content owners need introduce an Australian Hulu or Netflix equivalent or assist with those US services entering the Australian market.

To overcome a network’s potential loss of branding, could the network not negotiate with the platform provider to have the network watermark overlaid on the content, along with a cut of advertising revenue earned from a view of the same?

The other roadblock preventing a Hulu from launching in Australia is the output deals Aussie TV networks have struck with US studios such as NBCU, Disney and Warner-Bros and UK companies like the BBC.  There has been a lot of press in recently about the decrease in value that a US supply deal offers Australian TV networks.  This is because Australian content (whether drama, reality or sport) now dominates the ratings.  We have seen recently that Nine choose not to renew its Sony deal (Seven has picked-up some Sony content instead) and Seven reportedly signed a limited output deal with NBCU. Also, as reported in the Australian,  Nine now spot-buys movies from the Walt Disney Company and Paramount and Universal’s old movie deal with Ten expired and was picked up by Seven.

In such a climate, is it not the perfect time for networks and US Studios to work together to bring Hulu or similar services to the Australian market?  Australian consumers are savvy and the continued failure of Australia’s media companies to create a content-owner neutral platform to watch content online from any device is not only frustrating consumers but no-doubt not helping in the fight against digital piracy.

Hulu’s new-found capital injection is maybe a reason to hope that in the near future Australian consumers will have a similar service offering as US consumers have enjoyed for many years.


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