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such a nasty woman | by maryann johanson

question of the day: Are sites like Hulu and YouTube “anti-consumer, anti-media employees, and even anti-America”?

Last week at Deadline Hollywood, Nikki Finke posted some extraordinary comments by watchers of Hollywood and measurers of the performance of its products regarding the upheavals media is going through at the moment:

I’ve seen 3 deep-dive reports just this month about studio-produced entertainment going online. And the consensus is that Big Media could destroy what all three reports call the entertainment “eco-system” especially if they train consumers to think that they’re entitled to see professionally produced stuff for free online.

That prospect makes Laura Martin at Media Metrics apoplectic: Sites such as Hulu, she writes, are “anti-consumer, anti-media employees, and even anti-America” — and put “at risk” more than $300 billion worth of market value (that’s the combined price for the 30 stocks in the Bloomberg US Media Index). The reason? Media companies will lose a lot more revenue by giving shows away for free online than they will from pirates. Even worse, portfolio managers may decide to dump all of their entertainment stocks when they see what low regard studios and networks have for their best products. Less investment cash means fewer and crappier productions… and then you just kiss the business goodbye.

Less output from Hollywood might not be a bad thing at all: there’s too much stuff now, and too much of it sucks.

More from Finke:

Credit Suisse’s Spencer Wang shares her concern, without the hysteria. He notes how a broadcast show makes at least 64% less online than it does on TV and a cable show about 36% less. So why not run more ads online, charge consumers a fee, or make them buy a subscription? Too late. More ads will drive viewers away, he warns. And consumers “are not trained to directly ascribe monetary value to TV shows.”

I think Wang is wrong. I think consumers do understand that content worth paying for is, well, worth paying for. (iTunes proved this with music: give people an avenue through which they can pay for the stuff that is worth paying for, and we’re happy to pay for it.)

The problem is, it seems to me, that not enough stuff is worth paying for. Isn’t it anti-consumer and anti-American to foist products off on your customers in the full knowledge that if you throw enough crap at the wall, some of it may stick? Aren’t cable-company monopolies and packages that force us to pay for channels we don’t want anti-consumer and anti-American? Aren’t the multinational corporations that produce most of our entertainment anti-media employees in how they concentrate most of the money at the top, away from the people who actually do the creative and technical work?

Why does it often seem as if those who complain loudest about things being “anti-American” appear to assume that greed is a noble American value worthy of protection? Couldn’t Hollywood make less obscene profits, still ensure a comfortable living for its workers (while also spreading those profits around more equitably), and still produce quality entertainment that audiences are genuinely happy to pay for?

Or am I living in a utopian dreamworld? Are our values so hopelessly out of whack that they can never be realigned?

Are sites like Hulu and YouTube “anti-consumer, anti-media employees, and even anti-America”?

(If you have a suggestion for a QOTD, feel free to email me.)

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  • Pen Dragon

    If America has a founding principle, it is individual liberty, which naturally extends to the power of free markets. And so this begs the question of how free-market forces pushing outmoded business models into complete extinction could be “anti-American”. Restricting domestic commerce (by, say, forcing studios to air their product on-air rather than online) is anti-American.

  • amanohyo

    I’ve always known that the internet would destroy America, but Wang and Martin are too late, for the true villain is already in our midst: public libraries. Those librarians are all pinko-commie liberals, giving people free, limited access to products that good, hard-working Americans buy at Barnes and Noble or possibly Borders. And our children are being trained, nay brainwashed not to ascribe a monetary value to literature. I tried to warn them, but they wouldn’t listen, now look around you at the monsters we have become. Each time a see a small boy leave that cursed socialist hive, his tiny arms innocently wrapped around a pirated book, I cry a single tear for the death of the American dream.

  • Matt

    You hit the nail on the head Pen Dragon. Saying something that threatens you is “anti-american” sounds a lot betterr than “we can’t compete.” I think the most likely truth is that the internet distribution is the wave of the future that’s going to wash traditional broadcast away. And they see it too. And the traditional distribution formula is what made these people rich in the first place; so any and all rhetoric that just might distract from the real issue can and will be spouted.

    Which makes sense really. It’s just a new set of clothes for what MAJ calls the “throw crap at the wall, some of it may stick” strategy.

    Amanohyo, that’s hysterical. Go write for Jon Stewart or Stephan Colbert, and give them better ratings.

  • JoshB

    I think consumers do understand that content worth paying for is, well, worth paying for. (iTunes proved this with music: give people an avenue through which they can pay for the stuff that is worth paying for, and we’re happy to pay for it.)

    You can pay for TV shows and movies at iTunes, and at Amazon video-on-demand for that matter. Nothing stopping anybody from doing that. Wang’s point is that American consumers are not accustomed to the idea of paying for TV shows, whereas we have long been accustomed to paying for music.

    Also, some people are willing to pay for stuff worth paying for. Many others are not, at least not when they have a choice.

    That said, I can’t see how legal, authorized distribution methods like Hulu are anti-consumer or anti-American. Laura Martin must have no intention of being taken seriously.

  • Victor Plenty

    When media giants give away product for free, it’s most likely an attempt to crush the growing competition from smaller producers. When their analysts lump together Hulu and YouTube, they are most likely trying to obscure the differences between those two outlets. YouTube is by far the bigger threat to their power base, and Hulu is a relatively feeble attempt to counter that threat.

    If these corporations really cared at all about consumers, media employees, or even America, they would spend more of their energy making products viewers and listeners actually want to pay for, and less trying to “train consumers” to pay for worthless junk.

  • Jim Mann

    One point that Martin misses is that, if networks did not give away some content away online these days, some shows would fail. The reason is that many shows these days are far less episodic than shows of twenty years ago.

    Twenty years ago, if I somehow missed a couple of episodes of Lost, I’d be so lost [sorry] that I’d probably stop watching and maybe wait for re-runs. Now, I go online and watch the episodes I missed right away, then can start watching the show again. And this applies to a number of shows today. You need to watch every episode, and shows online give us a way to do that.


  • Ryan H

    I think the article is right in at least one sense. If the big media companies convert to online distribution and undercut their current methods before they have some method of replacing the income the investors SHOULD cut them off and their stocks SHOULD tank.

    To a certain extent I have a small amount of sympathy for the traditional media companies. The new distribution methods allow for very targeted audiences and lend themselves to much more niche productions. However, this is directly contradictory to the current business models.

    I don’t think current media companies CAN survive the transition, or at least not without such drastic overhauls that their current incarnations will have effectively ceased to exist anyways. It’s the rock and the hard place. If they jump on board with the new methods they doom themselves. If they ignore them they are doomed anyways.

  • Katherine

    Twenty years ago, if I somehow missed a couple of episodes of Lost, I’d be so lost [sorry] that I’d probably stop watching and maybe wait for re-runs. Now, I go online and watch the episodes I missed right away, then can start watching the show again.

    That’s certainly what I do, Jim. However, I’ve noticed a trend the past two years where for some of the more popular series networks will start off posting an episode online the day after it airs, and then, halfway through the season, hold it back 8 days before posting. You can’t see the episode you missed until after the next episode airs. That happened with BSG and House, and it pissed me off something fierce. Plus, it took me away from watching them on TV, and isn’t that what they want, anyway?

  • allochthon

    I canceled my cable a few months ago, and now watch everything online – a combination of hulu, youtube, netflix and network sites. I don’t regret it a bit.

    There’s one fact the music and video industries can not get around. Once digital, a file is infinitely copyable. There will never be any technology that can undo that. DRM has failed miserably. Until someone can come up with a business plan that *works* with this fact, they’re going down.

  • doa766

    it’s funny that the question is not if those sites are a good thing or bad thing, is if they’re anti-american or not

    it seems that “good” and “american” are two very different things nowadays

    anyway, the entartaiment industry will always have to adapt to technology, they mught make a fuss at first with trials but in the end they have no choice but to submit

  • @Katherine I had the same reaction to the sudden 8-day delay. WTF? If you let me watch last week’s episode before this week’s, I’m more likely to watch this week’s on TV. If you make me wait until after next episode, then I have to wait to watch THAT episode, and now I’m not going to watch a single episode on TV for the rest of the season. Idiots.

    I can see delaying even six days to make it slightly inconvenient if you want to watch and discuss with friends, but not making it available at least day-of is counter-productive.

  • I tend to like anti-Hulu messages a lot better when Dennis Leary delivers them.

  • Btw, they’re advertising Hulu in movie theatres now. (In fact, I remember seeing one such ad before the start of the recent Star Trek movie.) So apparently not all members of the entertainment industry have issues with it…

  • misterb

    Modern media may eliminate the suits from the entertainment business, but they won’t eliminate the artists. That’s where movies and music are different – a good musician can grab a cheap guitar or sing on the street corner, and make great music. But to make a movie, you need the suits. Even if you shoot street riots on your cell-cam – you can’t make a movie without production staff. So I’d be careful of using iTunes analogies … Even so, the industry has changed. Even the big bands make less money off iTunes than they did from CD’s – the money now comes from live performance that is advertised by iTunes.
    Perhaps the new biz plan for the film industry is youTube “reality” tapes followed by live performance tours. That would put the hard work back in show biz.

  • RogerBW

    Sounds very like the panic over the decline in new car sales in the UK – well, actually, we already have more than enough cars, thanks.

    It’s time to admit that copyright is dead and start working out new ways to get people paid for writing stuff. (For “writing”, read also “filming” and whatever else.) Obviously the companies that are utterly dependent on (a) copyright and (b) total lack of creativity aren’t going to do this.

    Personally I think the best bet is probably a patronage model. Want that 11th season of Stargate? Put some money down. If they get enough money, they’ll make it, and you get to see it first (and your name in the credits).

  • Keith Z-G

    I bet they make the same arguments about everything; I know they do about software, entirely ignoring things like Linux and other Open Source efforts (which, incidentally, are where many of the technologies the big companies are relying on are from; OSX’s browser is based on a Linux one, for example). The Big Content companies can’t fathom community efforts, so any weakening of their artificial strangleholds on content seems to them like the death of that entire medium or business.

    Just because people aren’t shelling out for downloads of the latest episode of Dancing With The Stars doesn’t mean it’s impossible to create audiovisual episodic content that people will pay for! And even moreso it doesn’t mean people won’t create it; just like communities of computer programmers aren’t mimicking Microsoft but *are* creating a complete ecosystem of software, individuals and independents may not be creating Jon & Kate Plus 8 but they are creating episodic entertainment…and it’s that much better for it.

    Especially with the proliferation of consumer-level technology that’s advanced enough for recording and editing beyond what was available to *studios* just decades ago, there’s tons of promising stuff out there (Graduates comes to mind, although perhaps that isn’t the best example since nothing more seems to have come of it, but it’s still a more promising pilot episode for a comedy than most of what The Industry has churned out in the last few years!).

  • Paul

    Marx predicted that capitalism would fall after capitalism made production so efficient that it was no longer profitable: production would outstrip demand by so much that prices would drop too far.

    First it happened in agriculture. The European and American governments have been propping up food prices for decades now to keep their farmers in business, from protection from imports to turning corn into fuel. They’ve also been subsidizing farmers so they can support their families on those still low prices.

    Now the Internet is up ending the table in the market for information. It’s hurting newspapers and magazines the most, but the threat is felt across the board. The difference is that the Internet is all about distrubtion, not production, so the information industry is up ended unevenly. It’s still damn expensive to make a lot of movies, but that expensive product is so easy to steal.

    I read, and wish I could remember where, that Mircosoft and IBM had figured out the technology to prevent piracy, but the FBI squashed it so the Mafia and terrorists couldn’t use it to protect their own computers.

  • Anne-Kari

    @amanohyo: Hee!

    Regarding the idea that Hulu etc is going to somehow destroy all that is good and right in America’s media: Oh please. Talk about a major overreaction. I’m old enough to remember when VCRs first came on the market and every television broadcasting company freaked out and said this was going to put them all out of business because people were going to record shows and then fast forward through the ads. Same argument made when Tivo came on the market. Somehow, those companies are still in business.

    I think that every big media-based company is terrified of change unless they can control it. For that matter, I think pretty much ANY big company is like that – unless they are the ones orchestrating the change in their marketing and consumption of their product, they freak the fuck out.

    As for me personally, I embrace all the technology. I watch some live TV, I watch some Tivo’d stuff, I watch Hulu and have paid money to download video from iTunes.

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