It's not that they haven't figured it out, it's that Hulu's average revenue per user earns much less than DVD sales or TV sales.
Hulu, Netflix, etc. all WANT licenses in perpetuity worldwide. It's not they don't want to offer it everywhere, it's that the licensors won't let them.
Profits for online media need to be higher to kill broadcast. The average user watches 6 episodes on Hulu per month and earns $2 for that month. Buying a 12-episode season for $30 means that a DVD buyer is 750% as profitable as a Hulu watcher. Hulu has about 30 million users, but in terms of TV profitability, you can wave your hands a little bit and equate the importance of that audience to 4 million TV watchers.
Similarly, Dish Network has 14 million subscribers, a much lower number than Hulu or Netflix, yet has far greater profit and therefore much greater purchasing power for content licenses.
It's a bitter pill to swallow, but Hulu and Netflix are such a great value that they're not providing enough of one to be the destination for the newest, best content. Which is why they're working on creating original content - hoping that, among other things, it increases eyeballs, which increases ad sale profits, which makes it more profitable to the entrenched content producers - which, finally, is their path to dominating the online entertainment market.
I think their strategy is wrong and that there's a better path.
I get what you are saying. I get that on Netflix for example they aren't just going to give away the latest series or episodes away for "free" to a standard account. I am fine with this. What I want though is an option where I can pay to watch the shows I enjoy. I feel it is so dumb that I need to request this.
If Netflix offered credits. £1 to unlock latest episodes I would pay that. I will probably purchase the DVD anyway. Why not? It would be really convenient. This shouldn't interfere to much with traditional TV channels. If you already have the relevant cable package you wouldn't be paying for the episodes again. You would just watch it on the cable channel or catch up or whatever.
Its the startling lack of consumption options which is empowering piracy. Right now I am downloading a US TV episode of a show I follow. The TV package to get this channel in my country costs £26.50 a month. Considering how little actual TV I watch it would be literally £7 per episode assuming the show is shown every week. I am buying the show's dvd box set when it comes out. I want to support the show. I want to see the extras. I would be paying episode by episode now if there was an option... alas... licensing prevents that. I find it so frustrating. Lobbiests in the UK are already pressuring Google to delist or devalue links to copyright infringed content. I just wish a little of this gusto was put into creating new ways to legally access copyrighted content.
I see what you're saying and I think I agree with what you're getting at but to do so Netflix would need to build a radically different service and license it differently as well.
Hulu, Netflix, etc. all WANT licenses in perpetuity worldwide. It's not they don't want to offer it everywhere, it's that the licensors won't let them.
Profits for online media need to be higher to kill broadcast. The average user watches 6 episodes on Hulu per month and earns $2 for that month. Buying a 12-episode season for $30 means that a DVD buyer is 750% as profitable as a Hulu watcher. Hulu has about 30 million users, but in terms of TV profitability, you can wave your hands a little bit and equate the importance of that audience to 4 million TV watchers.
Similarly, Dish Network has 14 million subscribers, a much lower number than Hulu or Netflix, yet has far greater profit and therefore much greater purchasing power for content licenses.
It's a bitter pill to swallow, but Hulu and Netflix are such a great value that they're not providing enough of one to be the destination for the newest, best content. Which is why they're working on creating original content - hoping that, among other things, it increases eyeballs, which increases ad sale profits, which makes it more profitable to the entrenched content producers - which, finally, is their path to dominating the online entertainment market.
I think their strategy is wrong and that there's a better path.