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Fox Unveils Exclusive 8-Day Authenticated Window For Online Shows: Major Ouch For Hulu
Assuming Fox, one of Hulu's owners, was hoping to sell the site for top dollar, then you have to wonder about the consequences of a new plan it has announced to create an exclusive 8-day online viewing window solely for paying
subscribers of authorized distributors. The new plan is a major endorsement of pay-TV operators' TV Everywhere approach and could be the first salvo by broadcast TV networks in curtailing free online access to their programs. DISH Network is the first pay-TV operator to sign up for the new Fox plan.
For Hulu, the move would appear to be a double whammy. A key part of Hulu.com's value proposition and its ability to drive huge traffic was offering next-day access to select programs from its parent broadcast networks. Under the new plan, users would lose coveted free next-day access (plus a week) unless they were authenticated. Less traffic of course means less advertising revenue.
Compounding matters, by Fox adding value to pay-TV operators' on-demand and TV Everywhere initiatives, it dilutes the value of Hulu Plus, Hulu's subscription service. Even though Hulu Plus subscribers would still have prior season programs and presumably would also have current season program access in the 8-day window, there would be less reason to subscribe incrementally to Hulu Plus when the current season is available for no extra charge from DISH and other pay-TV operators.
The Fox move is yet another reason why prospective Hulu bidders will have such a hard time understanding what they'd really be buying and therefore how much they should pay. From the outset I've said that content distribution rights are the heart of Hulu's value, but if they're diluted, as Fox has now done, Hulu's value diminishes accordingly.
Categories: Aggregators, Broadcasters
