Hulu.com, the US based video streaming site, has been more successful than they perhaps had bargained for. Many viewers exchanged cable TV subscription for a fast internet connection and proceeded to watch their favourite shows on hulu.com, legally and ad supported.
Like iTunes did for music, hulu.com made it easier, and more convenient, to comply with the law than to break it by downloading shows from torrents or usenet.
Officially hulu.com is available to residents of the US only. Try to log onto the site from Canada for example and you’re informed that the service isn’t available up here.
Of course, in the age of the geek such obstacles are relatively minor and easily overcome. VPN service providers with servers in the US have seen a considerable upswing in business as viewers from outside the US clamour to use the service.
For hulu, this creates a problem. Their income model relies on guaranteeing their advertisers a certain number of viewers. Viewers who spend their cash in the US, not the UK or Canada or wherever else they might live. And unlike a traditional TV station broadcasting over the air, where the amount of viewers doesn’t affect operating cost, hulu.com has to pay bandwidth cost for every show or movie streamed. Bandwidth cost that’s paid for by targeted advertising. You can see the dilemma.
Hulu has reacted to this problem in ways that are as predictable as they are unsustainable. Recently VPN using viewers found that they were getting a message asking them to disconnect from the service before they could watch any content streamed by hulu. This move is designed to make sure that only bona fide residents of the US will watch the content and in turn be exposed to ads.
Unfortunately for hulu, this will not work. VPN providers aren’t going to let their new found customers cancel their contracts and drift away, viewers will not just return to the dark days of cable bundles that few people need or want.
The VPN companies have already started rotating IP numbers, making it almost impossible for hulu.com to keep track of who is a local user and who isn’t. Add to this the simple fact that many US based viewers use VPN services for perfectly legitimate reasons – you should never use public wireless without being protected by a VPN – and the battle hulu faces is lost before it has even started.
So what should they do? Hulu needs to make money to survive and it can’t sell non US viewers to their advertisers just yet. The solution seems easy to me. If I am logging in from outside the US, just sell me a monthly pass. I’d willingly pay 10 bucks a month to access hulu, just as I willingly pay iTunes to watch a show or purchase a movie.
Make it easy for people to support you, and stay within the law, and they generally will as services like pandora, last.fm and Apple have proven. Exclude people from content they want to access and they will find ways around the obstacles you’re putting up.
Hulu cites licensing agreements as the main reason why it can’t serve content to viewers outside the US. Local licensing agreements are of course completely irrelevant in today’s day and age. Whatever is published anywhere, is published everywhere, we might as well get used to it.