Soon, you'll have to pay for Hulu
Speaking last night at an Internet Week event sponsored by The Hollywood Reporter, Jonathan Miller, News Corp.'s newly-installed chief digital officer, said he envisions a future where at least some of the TV shows and movies on Hulu, the premium video site co-owned by News Corp. (NWS), NBC Universal and Disney (DIS), are available only to subscribers.
Miller, whose last job was running AOL (parent of Daily Finance), prefaced his remark by noting that he won't attend his first Hulu board meeting until Monday, so the scenario he foresees is merely his own speculation. But, he continued, "in my opinion the answer could be yes. I don't see why over time that shouldn't happen. I don't think it's on the agenda for Monday [but] it seems to me that over time that could be a logical thing."
And considering that Miller is in charge of coordinating News Corp.'s efforts to find new ways to get consumers to pay for digital content generated by News Corp.'s properties -- which include Fox Television, Fox News, 20th Century Fox films, The Wall Street Journal and much more -- his definition of what's logical is likely to carry a lot of weight.
Miller also talked about what he thinks newspapers will have to do to convince readers to pay for articles that they're used to getting free on the web.
I think what works for consumers most likely -- and this has to be tested, frankly -- is bundles. I think you have to figure out what are the right bundles that people buy and what's contained in that bundle. For example, you could have -- and I'm making this up entirely -- you could have a New York bundle, and that could consist of various papers or publications that are relevant to the audience in New York, and you could make that all, potentially, a bundle to a consumer at one price.Such a bundle, he added, might include not just content but also a device to read it on, such as a Kindle or an iPhone.
Miller illustrated the problems papers -- even those rare ones that, like The Wall Street Journal, have had some success getting consumers to pay up -- now face with a story from his own experience. After buying his first Kindle three months ago, he said, he canceled his $14-a-month subscription to The Wall Street Journal Online in favor of a cheaper subscription through Kindle.
I went from paying $14 to The Wall Street Journal to paying $10 to Amazon. Now the splits there, and I think this is relatively well known, are very, very much in favor of Amazon. So I became very much less valuable to The Wall Street Journal. That's part one. Part two is they don't know I exist. I went from being someone who's their subscriber to being someone who is an Amazon subscriber, which The Wall Street Journal has no visibility back to and cannot manage that customer relationship. . . . So they've lost both the customer management and, trust me, the lion's share of the economics.