Hulu Subscription Model: Ethically Questionable
Hulu, the high quality TV online behemoth, is rumored to be looking at a $9.95/mth subscription model for premium content, which isn’t exactly unexpected. What makes this interesting, however, is Comcast’s bid for ownership of NBC that would provide it with substantial reasons to promote, via their network’s bandwidth, Hulu over other services – a worrisome move for those who care, or should care, about Net Neutrality.
The idea, essentially, is for Hulu to continue behaving as-is, with most shows having only the five most recent episodes available, but charging a monthly fee for access to backcatalogs or, presumably, extra content – an entirely acceptable, and potentially successful, business move, despite arguments on both sides of the table. Problems arise when considering who owns Hulu: NBC, FOX, and ABC.
Until now, the tri-partner situation was rather successful, despite a few copyfight blips, and almost everyone was happy – except for the network executives who felt Hulu was stealing from their actual television ad revenue, despite their receiving income from the opt-in Hulu delivery system. If Comcast, a company not known for its spotless ethical reputation, is approved to takeover NBC, this would mean that Comcast, not NBC, would hold a large controlling stake in the online service, which is quite often at direct odds with its core business of cable television.
If Comcast chooses to promote Hulu over its cable services and other online video offerings, this would result in an ISP actively favoring one service over another, allowing high bandwidth rates for Hulu, and lower ones for services it’s unaffiliated with – all because they receive revenue from ads and the subscription model. The coin falls in the other direction as well, since Comcast could actively promote its own online services over Hulu, or hamper Hulu entirely in an effort to force consumers to purchase actual television service.
This situation, quite obviously, is one that revolves heavily around Net Neutrality and the conflicting interests of corporations: connection providers should not be allowed to own media endpoints that they could, legally or illegally, favor. Imagine if, as cellphones were becoming popular, AT&T had decreased call quality to non-AT&T phones, or had hampered the service heavily to ensure that their landline business was still profitable – the modern world would be very different, all because of a reluctance to adapt to new technologies and business models.
The FCC must act on both Net Neutrality and Comcast/NBC before it’s too late, especially now that the fears of many Internet watchdogs are coming true. If Comcast is allowed to go through with this purchase, and subsequently behave as they historically have, it will set a bad precedent for other ISPs, and possibly even other industries – AT&T and Verizon would no doubt be interested in purchasing other media entities to favor their bottom-line, with ABC and FOX as prime candidates. Services such as Netflix and YouTube could very easily be on the chopping block if either regulators or Congress aren’t careful – corporate greed, insensitivity, and a lack of ethical sensibilities should not be allowed to overrule common sense and, above all, the will of the people.
Kyle can be found on his blog, on Facebook, via email, or on Twitter.
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Obviously there’s a conflict of interest there between Comcast and the online component… with the inside knowledge of the company that I have, though, despite internal fiefdoms, they really are striving to move forward, and recognize that their cable holdings won’t be there forever. I think they’ll be putting a greater emphasis on Hulu in the future as an IPTV solution, or at least allowing it to develop that way, because that means they have an in to potentially _every_ US home, not just those in their own districts.
So, rizzn, are you *defending* Comcast?
I’d applaud them if they are intelligent enough to keep their various business entities separate and profitable, but given what I’ve seen from them – such as their denial for a long time that they ever filtered traffic based on size or type – leaves me doubtful.
They also have a few various online video properties that are in direct opposition to Hulu, so the question is if they’re going to actually support Hulu, do they discontinue their own internal clones?
–Kyle
In response to another comment. See in context »Sorry Kyle, but maybe you haven’t been keeping up. This is why non-lawyer bloggers should not be making up policy. Ever.
The FCC already ruled on Comcast violating net neutrality. FCC gave a trivial fine to Comcast for violating net neutrality. The FCC sued in district court. The FCC lost, and then lost again on appeal. The next appeal is to the Supreme Court, and the FCC will lose again. Unless Congress actually says that the FCC has the power to regulate the net neutrality on the internet, the FCC will never touch it.
TLDR: your argument that the FCC “must act” is worthless — they already did, and they failed.
Despite your inane and insulting tone, nosiree, I will respond to you for clarity.
The FCC is currently looking at passing official regulation on ISPs, possibly even classifying them as telcos so they fall under pre-existing regulation. This is what I meant when I referenced the FCC, as those of us who care about these things understand.
Congress expressed interest in Net Neutrality legislation a few months ago, but put it off until the “more important” issues are addressed. This is what I meant when I referenced Congress, as those of us who care about these things understand.
Comcast’s acquisition of NBC has not yet been approved by regulators, and has a chance of being denied. This is what I meant when I referenced Comcast being handled, as those of us who care about these things understand.
And, finally, as far as the FCC needing Congressional approval to regulate, you’re wrong on this point as well, because they can choose to reclassify ISPs or provide new legislation – all within their mandate. Yes, it might be challenged at some level, but history has shown it is likely to stand.
Thanks for being so condescending and giving me a chance to respond to your vitriol.
–Kyle
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