Friday, May 04, 2012

Kabletown Takes Over Hulu

            Just the other day the New York Post reported that the online streaming website Hulu is now considering restricting access to its cache of streamable episodes to only those who already have a cable subscription.  On some level this shouldn’t come as a surprise.  Over the past year or so, Hulu has quietly restricted access to several of its shows.  Episodes that you could once watch the day after airing can now only be accessed a good week or so after they hit the airwaves or cable box.  Hulu also introduced the idea of Hulu Plus, a service for more devoted fans of television and movies that would grant access to a backlog of older shows and a good number of films.  Neither one of these moves was unreasonable.  It makes sense that Hulu would want to make people wait for their favorite TV shows in exchange for the convenience of watching them whenever you wanted.  And given time, Hulu Plus might have turned into a viable alternative to Netflix.  But both events signaled that Hulu was looking for more ways to increase revenue from its website.

            But you could tell that Hulu’s corporate backers were getting a little antsy about potential customers “cutting the chord.” More and more people preferred waiting a week or so for the shows they loved instead of shelling out nearly a hundred dollars a month for a handful of decent TV shows.  For a long time cable companies had convinced people to subscribe to nearly a hundred choices at ridiculous rates when most people only watched four of five channels.  For years consumers have been demanding an a la carte model where they could choose a limited number of channels for a reduced rate, but it wasn’t offered because cable companies have near monopolies in many cities.  But the internet changed all that.  Now you could get anything you wanted, legally or illegally.  At first, like the record companies, the entertainment industry freaked out about piracy.  But eventually they came around, and decided that they if they couldn’t police the internet, then at the very least they could corral viewers to legal websites where they could make some money off of ad revenue.  Those waiting for an a la carte way to watch television could now do so.  If you subscribe to Netflix and wait a little bit for your more recent TV shows, or watched the basic channels using an antenna, then you could pretty much watch whatever you wanted and do so legally.  Only the most impatient viewer could complain. 
            So what went wrong?  Viewers got what they wanted all along and the media companies made a little bit of money.  What’s the problem with this arrangement?  And why would Fox, NBC, CBS, and ABC want to limit access to shows online that people can already get for free through the airwaves?  If anything, websites like Hulu give these companies a leg up on their cable competitors.  The answer comes when you look at who owns stake in Hulu.  One company, Comcast, also owns NBC.  In other words, they both produce television content and provide a means of delivering that content to people’s homes, and the most profitable means of doing both is by selling expensive cable subscriptions.  In fact, it might make more sense for NBC, one of the lowest rated of the major networks, to continue to offer free streaming services online in order to get the upper hand on their competition.  Of course, this analysis changes when you consider that Comcast is more concerned with the bottom line of its entire company rather than NBC alone. 

            But how did we get to this place?  For many it might seem (and, arguably, should seem) strange that a large corporate conglomerate is allowed to both serve as the creator of content and manage how that content gets into the homes of its customers.  If these companies were split, then it might create healthy competition.  Thanks to the internet, NBC could provide an alternative source for their content, and Comcast would have to court its customers with better options and prices in order to keep them from canceling their cable subscription.  In the end, the consumer would win.  There was a lot of controversy surrounding the FCC’s approval of the Comcast/NBC merger.  Perhaps the most damning aspect of that deal occurred several months after the FCC approved the melding of these two corporate giants.  A member of the FCC who had voted to approve the deal, Meredith Baker, received a cushy job at Comcast, the same company she was supposed to be policing.  While this may not have been illegal (although, arguably it should be), it sure as hell was unethical and showcases ways in which the line between the American government and the corporate world have been blurred.  Here is what California Democrat, Maxine Waters had to say about Baker’s free ride:

Baker’s move to Comcast, Waters said, “further confirms my suspicion that the [FCC]’s merger review — in cooperation with the Department of Justice — was overly politicized and rammed through in blatant disregard for the agencies’ responsibility to the American people. In addition to the Obama administration’s appointment of [the head of] NBC Universal’s former parent company, General Electric’s CEO Jeff Immelt, to his new economic panel the same week the Comcast-NBC merger was approved, Commissioner Baker’s resignation and frequent criticisms against the FCC’s review process underscores the pressure and influence the combining companies exerted over federal regulators. At every juncture, Comcast and NBC Universal set the terms of the merger’s approval as they co-opted civil rights organizations with philanthropic donations and pressured the administration to grant the approval in exchange for ‘innovation, investment, and job creation.’”

Waters’s words seem downright prophetic now.

            But perhaps one of the best critiques of this deal was its constant skewering on the NBC produced show 30 Rock.  Even as the deal between Comcast and NBC was going through in the real world, in 30 Rock’s heightened reality there was a corporate merger between NBC andKabletown, a corporation from Philadelphia that looked a lot like another corporation from Philadelphia, Comcast.  Eerily enough, Kabletown took over NBC on 30 Rock on the exact same day that Comcast took over NBC in our universe.  In the episode “It’s Never Too Late for Now,” Jack Doneghy, the head of NBC, must negotiate with Kabletown over licensing fees, that is, how much it will cost for the cable company to broadcast their product.  Liz Lemon, the ostensible heroine whose stance for what’s right almost always ends up getting bowled over by the corporation she works for, quizzically asks, “But aren’t NBC and Kabletown the same company now? That seems like a pretty big conflict of interest. Why would the government even allow that merger?”  To which, Jack replies, “It’s okay. Don’t worry. You just keep watching Bridalplasty.”  What I’m trying to say here is, haven’t we all just been watching Bridalplasty all this time?  Haven’t we?


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