Press Release
Free Press: Hulu Change Is Bad News for Consumers and Competition
Contact: Timothy Karr, 201-533-8838
WASHINGTON -- According to press reports Monday, the popular website Hulu will move to an authentication system similar to the “TV Everywhere” model large cable providers like Comcast favor. Hulu will now allow only those with a cable TV subscription to access its broadband video content.
Much of Hulu's content is advertiser-supported network programming that’s available for free over the air on local TV stations. This sudden move to big cable’s preferred business model raises serious questions about whether Comcast is violating the conditions of its merger with NBCUniversal — a deal that gave the company a large ownership stake in Hulu. As a condition for approval of the merger, the cable giant agreed to relinquish any right "to influence, control or participate in the governance or management of Hulu.”
Free Press Policy Director Matt Wood made the following statement:
"Where there's smoke, there's fire, or at least a compelling reason to investigate. Under the terms of its acquisition of NBCUniversal, Comcast is forbidden from influencing Hulu's operations. Today's announcement looks an awful lot like an example of such influence, and is likely another in a growing list of Comcast merger-condition violations. This move to tie Hulu to cable TV service merits close scrutiny from the government agencies that approved the anti-competitive Comcast-NBCU pact in the first place.
"This development would be terrible news for consumers and competition in the online video market. While Hulu should be able to make money on its service, imitating cable's walled-garden model would actually deprive access to millions of willing purchasers. People who want to cut the cord and get rid of cable TV would be unable to watch programs on Hulu's website. Hulu is depriving itself of an online audience for no other reason than to hold people hostage to a cable TV subscription they don’t want.”
Much of Hulu's content is advertiser-supported network programming that’s available for free over the air on local TV stations. This sudden move to big cable’s preferred business model raises serious questions about whether Comcast is violating the conditions of its merger with NBCUniversal — a deal that gave the company a large ownership stake in Hulu. As a condition for approval of the merger, the cable giant agreed to relinquish any right "to influence, control or participate in the governance or management of Hulu.”
Free Press Policy Director Matt Wood made the following statement:
"Where there's smoke, there's fire, or at least a compelling reason to investigate. Under the terms of its acquisition of NBCUniversal, Comcast is forbidden from influencing Hulu's operations. Today's announcement looks an awful lot like an example of such influence, and is likely another in a growing list of Comcast merger-condition violations. This move to tie Hulu to cable TV service merits close scrutiny from the government agencies that approved the anti-competitive Comcast-NBCU pact in the first place.
"This development would be terrible news for consumers and competition in the online video market. While Hulu should be able to make money on its service, imitating cable's walled-garden model would actually deprive access to millions of willing purchasers. People who want to cut the cord and get rid of cable TV would be unable to watch programs on Hulu's website. Hulu is depriving itself of an online audience for no other reason than to hold people hostage to a cable TV subscription they don’t want.”
