Wednesday, December 09, 2009

The Coming 'Hulu for Magazines'...

With the media industry in a panic for several years now over the sustainability of its business model, the moderate success of Hulu is becoming the fad standard to follow.

As Peter Kafka writes, the magazine industry is finally ready to announce that it is forming a joint venture to distribute and sell digital versions of its products.

This "Hulu for Magazines" will include the industry's behemoths such as Time Warner, Conde Nast, Meredith, Hearst, and News Corp. The central idea is that, like Hulu, the content owners will create a single digital standard "that is designed to control distribution and sale of their product instead of ceding that to digital powerhouses like Apple (AAPL) and Amazon (AMZN)".

Which makes sense from their perspective. However, basing your enterprise on Hulu's business model is no panacea. First of all, let us remember that Hulu still isn't actually turning a profit. Call me crazy, but somehow that seems like it should matter. Second, there is greater consumer demand for streaming HQ video online than there is for print media. Plain text is already everywhere in cyberspace, but streaming high-def episodes of It's Always Sunny in Philadelphia are not. Third, piracy of text is a joke compared to video. All one has to do is re-type into WORD what they're reading, as opposed to decrypting massive amounts of video data. And fourth, Hulu itself, it should be remembered is not a long-term solution either. There are already ways of getting around it (like using Bittorrent), so it's not like the genie was ever in the bottle in the first place. Eventually a tipping point of users will be reached where Hulu itself will be scrambling, again to protect everything, in an effort of futility.

Thus, it appears that Hulu for magazines is coming, whether it's a wise move or not. My money's on Not.


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