Home Screening Centers: A Look at Hulu and YouTube

While keeping tabs on Hollywood, I came across the news that MGM has signed an agreement with YouTube to allow the site to legally carry certain movies and video clips. While the offerings are by no means of top quality (they include installments from the original American Gladiator competition and the recent kung-fu movie Bulletproof Monk), this announcement is yet another instance of the studios of Tinsel Town slowly feeling out the possibilities of online posting. For instance, Netflix is gradually expanding its "Instant Watch" library, signing contracts with CBS and Starz to let subscribers access their content on the Internet. CBS is also sponsoring its own channel on YouTube, including not only episodes from its current programs, but also classic episodes from such series as the original Star Trek adventures. These developments made me wonder what attracted companies to certain web-based "on demand" video platforms, and what deals were being made around advertising to support these airings. To get a sense of the general opinion about these media players, I visited various blogs, leaving my comments as I went. The first relevant entry I found was by Mike Boland of the Kelsey Group blog, a company that focuses on analyzing "business, social, economic and technology trends" and how they affect markets. His post "Online Experiment: Losing the Remote" looks at streaming site Hulu and why it is increasing its audience (for a complete discussion, be sure to check out part two, which discusses the implications of Hulu on advertising). I then turned to Bits, a New York Times blog run by Saul Hansell, who explains why "YouTube Pales Next to Hulu's Spiffy Multiplex," an examination of YouTube and how certain of its traits may prevent it from attracting the films of big name studios. As always, my comments are posted below for ease of reference.

"Online Experiment: Losing the Remote" by Mike Boland
Comment:
Thank you, Mr. Boland, for your thoughts on the world of online video! As I read your post, I was suddenly struck by the realization that my situation is similar to your own, namely that nearly all of the programs I watch can be viewed on the web; indeed, I have come to prefer watching shows on my laptop as it allows me to access entertainment at my leisure instead of rushing desperately about to make sure that I am in front of the TV at the correct time. In addition, the quality of streaming video seems to be improving and the image is often better than the low reception my television gets on basic channels. While the clarity of picture does not, as you point out, equal that of HD, I am hesitant to agree that this handicap alone will stem the tide of those favoring online viewing over cable. It seems to me to be a small price to pay for fewer interruptions and more flexibility, and I believe that the number of people watching television on the Internet can only increase, especially given the trend of studios making content legally available, like MGM's recent deal with YouTube. Based on this, I was interested in your thoughts on the future of advertising in this medium. I have read Part II of your post and your discussion of Hulu's "limited commercial interruption" tactic. Do you think the five-minute ad break on regular TV will eventually become a thing of the past, in favor of these shorter, simpler marketing campaigns? Even if cable television remains active, this seems a likely scenario. Since DVRs make it easy to fast-forward commercials, stations may find it necessary to negotiate for "mandatory" advertising, in a similar fashion to web-based players, which suspend the ability to skip ahead until one thirty-second announcement finishes playing. Also, the practice of one company sponsoring an entire TV show is not an entirely new concept; programming decades ago used to be dedicated to the promotion of one product. Soap operas, for instance, got their start from detergent companies trying to take advantage of a target audience. I find it slightly amusing that the industry seems to have come full circle and is taking a page from the early days of its existence.

"YouTube Pales Next to Hulu's Spiffy Multiplex" by Saul Hansell
Comment:
Thank you, Mr. Hansell, for your analysis of the flaws of YouTube! It is indeed a cluttered, difficult-to-navigate website which can be frustrating to use. It seems geared towards driving visitors to wander aimlessly around in the hopes of coming across something mildly interesting. Hulu, while not perfect, appears to have higher quality streaming and, as you say, much more easily accessible video. Granted, it is difficult to organize material when new eclectic entries are posted every day by anonymous users, but it would be advantageous to create a seperate area on the webpage for sponsored content, instead of burying it among the myriad of other media. I was interested in your belief that studios are hesitant about mixing their films with the homemade material of the average viewer, for fear of tarnishing their product. It is a very valid point; in my mind I seem to equate watching YouTube with junk television, a connotation which indeed carried over when I began looking its CBS channel. Mike Boland at the Kelsey Group Blog (http://blog.kelseygroup.com/index.php/2008/11/11/losing-the-remote-will-drm-win-over-content-producers/) says that part of the attraction of YouTube for its average user is its "faux underground appeal." Based on that, how likely is it that Google will overhaul the website? Are there any worries about alienating its consumer base? I feel that any aesthetic changes could only be a benefit and make the site more palatable to a mainstream audience, so long as the mechanics of posting remain the same. I am actually surprised that YouTube has managed to make deals at all with companies like CBS and MGM, given the issues that you have discussed. But the content they have agreed to distribute indicates just how hesitant they are about the platform; is airing episodes of the original American Gladiator going to gain YouTube any prestige? Doubtful. I wonder if these steps are made by studios to entice the website to step it up a notch and enhance its services, in the hopes of snagging more prominent material in the future.