Should Blockbuster call it quits?

[Mr Peabody]

Look at it like this, why would NBC create something to put themselves out of business or transition to another business? it wouldn't make sense. What they are doing if anything is giving those who want it an alternative to cables "On Demand". On Demand let's you watch a show after it has premiered. It's good if your out and missed your show and don't have DVR/TiVo. The whole Net TV has came and gone, I don't think there's anything that will revive it into anything more than a nitch product. With that being said it seems a lot of things are splintering off into nitches. Do you all notice standards going by the wayside? I think this is a bad thing, the loss of standardization I mean. If the internet is to be the pipeline it's going to have to win the bandwidth race, in my opinion. But some seem to think quality don't matter.

What I think would be cool and probably bigger than trying to offer second showings of current programs would be to offer people an archieve of old series. Like one thread was talking about the Monkeys and Partridge Family, this makes you nastalgic, you go and watch a couple episodes from your "on demand" what ever makes it available. Tune in Gilligan, Get Smart, WKRP in Cincinnati etc. Hell, who'd watch current TV any more? Well, I'd still have to DVR my 24 and Sarah Connor. I'm sure my wife couldn't live without Dr. House.

[Rich-n-Texas]

The former CEO (I think) of Hollywood Vidieo now owns a 6% stake in Blockbuster, and he commented that he doesn't think they'll be filing for bankruptcy any time soon.

Minus one pix.

[nightflier]

Why is it always some conspiracy with you for a company to want to make a profit from what they develop and manufacture?
...

Right now, Hulu is loaded with "free" content because NBCU is trying to build up the audience numbers.... Once they get people hooked and build up the audience, then you bet they will try to make money off of it by walling off portions of it exclusively for subscribers and/or cable/satellite users....At some point down the road, they will most definitely explore ways of making money off of the site, since they control the content.

Sounds to me like you're just as much of a conspiracy hound. Now I'm not suggesting that Hulu isn't going to do this, but let's dispense with the double standard.

Ad-supported sites like Hulu only work because NBCU is willing to subsidize the startup costs, and use the site as an infomercial for their broadcast programs (where the bigger money is made).

I think you're missing the whole point. Many of the most popular free & open source projects started out because a company footed the startup costs. NBCU is just following the same model.

And as far as the production expenses, that's still manageable if you consider how large of an audience Hulu could generate. The way I see it, Hulu does several things very well:

- it hurts the competition for paid TV services like Tivo and VOD.
- it generates tremendous momentum because it is free
- it creates a willing participant base comfortable enough to transition from the keyboard to the remote

It's a numbers game, and with enough viewers, the ad dollars will pay off. Imagine for a minute that one of the big music distributors had offered free 32Kb, or even 64Kb MP3 downloads of all their music with the pitch that to get CD quality, people had to buy the album. If that would have happened, there would never have been a Napster or iTunes. Hulu is doing the same - it's lower quality, but it's enough to get people hooked. Once they are, they can pitch BR disks or higher-quality content.

And I'm only talking about new releases. I say this because I think any TV show that has already aired and any movie that's already been on DVD for a few months is worth a fraction of it's new/fresh price. In digital form it's worth even less. Maybe what Hulu is doing is reminding us that we've been paying way to much for old content and that it's time for the consumers to expect, demand, and receive fair prices. Why should we pay such high prices for digital versions of music, TV, and movies we have already seen and most likely already own in another format? Times are changing, and Hulu may very well be the first one of the big media companies to comprehend the true meaning of the writing on the wall (because it's been there for a while).

What most Americans just can't get their head around is that there are ways to do things without having to generate profit. Not everything has to grow financially, make investors rich, and become the next wall-street success story. There are many worthwhile endeavors that will do just fine if they just break even, or even run at a loss. As long as it provides a great-enough benefit to enough people, then it's been worth the effort.

Now I don't know if Hulu will do that - frankly I'm not even sure if they know where this is going - but that still doesn't mean the concept is dead. I've had countless debates with others here about this very same idea and every time the conversation turns into a pointless cackle littered with insults. But take a look around. The economic profit-generating system we have all come to accept as the standard is burning up all around us and what is rising out of the ashes is a lot more about keeping people working, fairly compensating every employee (not just the CEOs), and reversing privatization in favor of government ownership.

This is because those values are seen as stabilizing and sustainable. So maybe Hulu is onto something. Maybe it learned a few things from Linux, Apache, and Ubuntu. Maybe these can coexist with private businesses and help each other out along the way. I just read another article that suggested that the music industry has all but lost its battle against piracy - who's to say the same will not come true for video? And as far as movies requiring Waterworld-like budgets to survive, I the risks of flopping are too great for such a business model to sustain itself. That movies need to cost so much sounds as hollow as the cries of yacht builders against the luxury tax. Prices are coming down in every industry and those companies that resit the price-drops will be put out of business by those that resist a little less. That is what happens in a retracting economy.

[Woochifer]

Sounds to me like you're just as much of a conspiracy hound. Now I'm not suggesting that Hulu isn't going to do this, but let's dispense with the double standard.

Unlike you, I'm not being a conspiracy hound because I cited an article that indicates NBCU has had discussions with the cable/satellite companies to see what kind of a fee they can get in return for exclusive access to certain features and programming. I'm working within the realm of reality. Cable/satellite companies are looking for ways to retain their subscribers. Cable/satellite companies are betting that expanding programming access to include online content is one way of keeping subscribers.

Look at it this way, both sides have much to gain through this kind of arrangement. Cable/satellite companies get to offer their subscribers web access to channels they get at home, along with exclusive access to content. NBCU already gets revenue from cable/satellite companies for Bravo, USA, Sci Fi, MSNBC, CNBC, A&E, History, Weather Channel, Oxygen, and others. This would expand on that. All the while, NBCU can continue to develop Hulu and sell access to hardware manufacturers and other parties. Having exclusive access to certain portions of the Hulu sites adds value to a cable/satellite subscription, and that's what they need to retain their subscriber base.

ESPN360 is built around the same model in that they allow access to their free content (which includes live sporting events) only if your ISP has paid to license the site. I can access the site because I use AT&T, whereas my neighbor who's on Comcast cannot access the site. I know somebody who wants to cancel his internet cable account and switch to AT&T because he wants to watch Nebraska football at home (since ABC's west coast markets rarely show the Big 12 games locally). Doesn't matter to him that his download speed with AT&T will be only half of what he gets with Comcast. Content is king.

I think you're missing the whole point. Many of the most popular free & open source projects started out because a company footed the startup costs. NBCU is just following the same model.

Hulu is not an open source project, and there is no GPL on the content. They're building up the site because it directs viewers to the main network, where the ad revenue is. Once they have the viewership, then they got many different options, including selling access to the site to the highest bidders.

It's a numbers game, and with enough viewers, the ad dollars will pay off. Imagine for a minute that one of the big music distributors had offered free 32Kb, or even 64Kb MP3 downloads of all their music with the pitch that to get CD quality, people had to buy the album. If that would have happened, there would never have been a Napster or iTunes. Hulu is doing the same - it's lower quality, but it's enough to get people hooked. Once they are, they can pitch BR disks or higher-quality content.

And the numbers on Hulu pale compared to what the network generates, in terms of both audience and revenue.

If the music companies offered their content totally unrestricted for free, their revenue model would have collapsed 10 years ago. You mistakenly assume that most people will pay to obtain a higher quality version of something they otherwise get for free.

Hulu is not the same thing because a TV series is not the same thing as a music album. TV series can be aired online, because the network has new episodes coming out every week. Streaming the episodes online serves as promotion for upcoming episodes, and that's what has bourne out in the ratings books.

And I'm only talking about new releases. I say this because I think any TV show that has already aired and any movie that's already been on DVD for a few months is worth a fraction of it's new/fresh price. In digital form it's worth even less. Maybe what Hulu is doing is reminding us that we've been paying way to much for old content and that it's time for the consumers to expect, demand, and receive fair prices. Why should we pay such high prices for digital versions of music, TV, and movies we have already seen and most likely already own in another format? Times are changing, and Hulu may very well be the first one of the big media companies to comprehend the true meaning of the writing on the wall (because it's been there for a while).

And by putting the content onto the web before any other medium means cutting out the revenue legs from under the industry. You're right in that a first run is when the content is worth the most. But, the web is nowhere near the most lucrative revenue source, and has only a fraction of the audience of broadcasting, movie theaters, and home video purchases.

On a movie release, there's no ad revenue stream big enough to make up for what studios can get from box office and home video sales. That's why commercial broadcast of movies is so far down on the pecking order. Unless people will actually pay to view a movie through Hulu or some other streaming site, it can generate nowhere near what other sources have proven they can generate. The writing on the wall as you refer to it is that the web is a powerful promotional mechanism, and broadcasters are using it to aggregate an audience that has otherwise become more and more fractured.

What most Americans just can't get their head around is that there are ways to do things without having to generate profit. Not everything has to grow financially, make investors rich, and become the next wall-street success story. There are many worthwhile endeavors that will do just fine if they just break even, or even run at a loss. As long as it provides a great-enough benefit to enough people, then it's been worth the effort.

A noble notion, until you look at who ultimately owns Hulu -- GE. Think they're more about "worthwhile endeavors" than generating profits for the next quarterly report? Isn't Jack Welch the CEO who claims that he discovered the gravy train of outsourcing to India?

Now I don't know if Hulu will do that - frankly I'm not even sure if they know where this is going - but that still doesn't mean the concept is dead. I've had countless debates with others here about this very same idea and every time the conversation turns into a pointless cackle littered with insults. But take a look around. The economic profit-generating system we have all come to accept as the standard is burning up all around us and what is rising out of the ashes is a lot more about keeping people working, fairly compensating every employee (not just the CEOs), and reversing privatization in favor of government ownership.

Like I said, to NBCU, Hulu is nothing more than just another commodity where they will build up the value, and ultimately decide how best to exploit it. Whether that's spinning it off, using it as a promotional mechanism for NBC shows, or trying to turn it into a revenue cash cow, Hulu is controlled by a company that embodies the standard (after all, they're one of the companies that make up the Dow Jones index). You can argue all the altruistic possibilities you want, but so long as Hulu is part of the GE corporate family, that's all just a bunch of happy talk.

This is because those values are seen as stabilizing and sustainable. So maybe Hulu is onto something. Maybe it learned a few things from Linux, Apache, and Ubuntu. Maybe these can coexist with private businesses and help each other out along the way. I just read another article that suggested that the music industry has all but lost its battle against piracy - who's to say the same will not come true for video? And as far as movies requiring Waterworld-like budgets to survive, I the risks of flopping are too great for such a business model to sustain itself. That movies need to cost so much sounds as hollow as the cries of yacht builders against the luxury tax. Prices are coming down in every industry and those companies that resit the price-drops will be put out of business by those that resist a little less. That is what happens in a retracting economy.

Check your numbers. The box office numbers are way up this year. This is because during recessionary times, consumers tend to forego vacations and more expensive entertainment options in favor of staying close to home and going to the movies. This is in line with historical trends where the moviegoing audience increases during recessions. Also, if you combine Blu-ray and DVD sales, home video sales have been on the rise.

And as far as big budget movies go, look at the revenues. Which movies are the ones that generate the highest box office returns? Generally, it's the big budget $100+ million movies. A megahit like The Dark Knight can by itself deliver the entire annual target profit returns for a studio. Think that putting that movie on the web could've generated $1 billion in ad revenue? I don't think so.

[pixelthis]

The former CEO (I think) of Hollywood Vidieo now owns a 6% stake in Blockbuster, and he commented that he doesn't think they'll be filing for bankruptcy any time soon.

Minus one pix.

I never said they would.
At least not yet
The video store was created out of nessesity, and is grossly inefficent.
The markets hate that.
Oil to make the disc, the package, to put the whole thing together, transport it to the store,
oil to drive to the store, drive home, and back, coal or something else to power the store,
oil for employees to drive to the store, etc.
When all you really have to do is push a button on your cable or sat box to get the program.
Because THAT is what you are buying, information.
OIL IS CHEAP NOW BUT NOT FOR LONG, and in todays tight economy video stores will be the first to go.
They are going now if you will pay attention.

[nightflier]

OK, fine, then Hulu is following the shareware model, like PkZip and those types. The problem with that model is that very few of these succeeded once they implemented the bait & switch. If Hulu does go down that road, it will likely loose a lot of viewers. The reason people on the web love it is because it is free.

In contrast, many applications that went from shareware/commercial to open source thrived, and are gaining momentum in this economy. Maybe Hulu's only raison-d'être is to kill off the competition (Tivo, VDO, Vudu, etc.) and once it accomplishes that, it may also just go away. If the corporate heads are indeed the capitalist profit-uber-ales types, well then I really don't think they know how to make Hulu a cash cow either. I can only hope they spin it off into an open-source project or that someone in the open source community develops something similar when they pull the plug.

during recessionary times, consumers tend to forego vacations and more expensive entertainment options in favor of staying close to home and going to the movies.

Well then does it also not follow that during recessionary times people opt for the less expensive home entertainment options too? Hence, they'll choose Hulu over Tivo, rentals over owning, DVD over BR, and the less expensive HT gear over the more expensive gear. This would go a long way to explaining which businesses are thriving now. It would also suggest that downloads will increase and physical media will decrease. So following that same logic, Hulu will continue to chip away at DVD and BR.

To bring this back around to the original topic, consumers will also skip the B&M stores like Blockbuster and go with the more hip and all-online option of Netflix, which is precisely what we're seeing. Yes BB had the online sign-up for their mail-order service, but Netflix was way better and offers downloads now, too.

And as far as big budget movies go, look at the revenues. Which movies are the ones that generate the highest box office returns? Generally, it's the big budget $100+ million movies. A megahit like The Dark Knight can by itself deliver the entire annual target profit returns for a studio. Think that putting that movie on the web could've generated $1 billion in ad revenue? I don't think so.

But what if it flops? That's a considerable risk. I'm going to guess that those kinds of numbers will become the exception rather than the rule and could eventually go away all together. At some point the insurance company that's left holding that bag for the next Terminator movie, is going to say, you know, Mr. Cameron, not this time. Those kinds of expenses are entirely out of tune with the world we now find ourselves in. Don't believe me? Look at how much attendance at sports venues has dropped - sports is supposed to be recession proof, right? Maybe movies aren't there yet, but they will get there too.

Then there's the moral issue. I hate to do this to such a popular movie, but there's a moral cost here. What if The Dark Night had never happened and that $100M had been put to use for a good cause, like orphanages, stem cell research, saving 10K jobs at GM, or whatever. Is that worth more than $100M in the long run? Probably. Yes, I know I'll probably get shafted for saying this, but I for one would have gladly traded the film for one of these. OK, too much of an offense? Then how many people would have traded the last Indiana Jones movie, instead? Still too offensive? OK, how about King Kong? My point is that sooner or later the ridiculously obnoxious price-tags of many of these movies will hit home. We'll probably still have some successes, but we'll also have more Waterworlds.

[Mr Peabody]

Video stores weren't created out of necessity, they were like any other service, there to make money. Actually, all the first places I rented from had movie rental as a side item to create more traffic and possibly bring in more money off the service.

[pixelthis]

Video stores weren't created out of necessity, they were like any other service, there to make money. Actually, all the first places I rented from had movie rental as a side item to create more traffic and possibly bring in more money off the service.

Before video rental there was no way except for laser (expensive) to get movies
into the home.
The early phase you talk about didnt last long, in my college town a dozen video stores popped up overnight, some charging fifty dollar membership fees, some more.
But there are more choices now, cable, VOD, the net, etc.

[Mr Peabody]

We got movies in the house for free, it was called network TV.

[Woochifer]

OK, fine, then Hulu is following the shareware model, like PkZip and those types. The problem with that model is that very few of these succeeded once they implemented the bait & switch. If Hulu does go down that road, it will likely loose a lot of viewers. The reason people on the web love it is because it is free.

It's free only because it leads to somewhere else that does have a revenue stream, and in the meantime, all the traffic to the site builds up the equity value of the site. It leaves NBCU with multiple options, all of which they can make money off of.

In contrast, many applications that went from shareware/commercial to open source thrived, and are gaining momentum in this economy. Maybe Hulu's only raison-d'être is to kill off the competition (Tivo, VDO, Vudu, etc.) and once it accomplishes that, it may also just go away. If the corporate heads are indeed the capitalist profit-uber-ales types, well then I really don't think they know how to make Hulu a cash cow either. I can only hope they spin it off into an open-source project or that someone in the open source community develops something similar when they pull the plug.

Again, you're trying to jam this open source analogy into a market that's inherently protective of its intellectual property. How can something like Hulu spin off into an open source project if the programming is all held under lock and key by the rights holders? It's nothing more than another YouTube clone without programming.

NBCU is looking for cash flow, because the potential is there. Like I said before, NBCU is shopping Hulu around to the cable/satellite companies because there's a buck to be made there, and mutual interest on both sides. Cable/satellite companies need to keep their paid customers from canceling service, and NBCU has a media property that can give the cable/satellite companies that incentive and increase the revenues over what they receive from those service providers.

[QUOTE=nightflier-Well then does it also not follow that during recessionary times people opt for the less expensive home entertainment options too? Hence, they'll choose Hulu over Tivo, rentals over owning, DVD over BR, and the less expensive HT gear over the more expensive gear. This would go a long way to explaining which businesses are thriving now. It would also suggest that downloads will increase and physical media will decrease. So following that same logic, Hulu will continue to chip away at DVD and BR.[/QUOTE]

Nope. You're ignoring the market information that I posted, which indicates that in recessionary times, people will spend more on entertainment options that are close to home. They will spend more on movies, and spend more on their satellite/cable TV, while spending less on other things. Notice how computer sales have plummeted?

People who choose Hulu are those few that actually want to watch TV programs through their computer. Why do I say few? Well, an academic study that just came out last week indicated that when tracking people's actual viewing habits, the study found that more than 98% of TV program viewing is still done while watching TVs (rather than computers or portable devices), and more than 75% of TV program viewing is done while watching LIVE TV rather than recordings. The conclusion of that report is that viewing preference surveys that do not track TV program viewing in real time, have grossly overestimated the actual demand for on-demand TV, PPV, downloading, and online streaming. And this finding is very consistent with the market data that shows things like Blu-ray sales growth and revenues far outpacing downloads and PPV options.

But what if it flops? That's a considerable risk. I'm going to guess that those kinds of numbers will become the exception rather than the rule and could eventually go away all together. At some point the insurance company that's left holding that bag for the next Terminator movie, is going to say, you know, Mr. Cameron, not this time. Those kinds of expenses are entirely out of tune with the world we now find ourselves in. Don't believe me? Look at how much attendance at sports venues has dropped - sports is supposed to be recession proof, right? Maybe movies aren't there yet, but they will get there too.

How are movie budgets out of line with "the world we now find ourselves in" if movie attendance has gone way up as the economy has gone south? (again, try reading my posts) It costs a lot more to go to a sporting event than a movie, and it's the higher priced entertainment options that have gotten hit the hardest. You can hypothesize that movies "will get there too," but that's nothing more than an uneducated guess that goes against the actual revenue data and the historical trends where movie attendance tends to spike during recessions.

Then there's the moral issue. I hate to do this to such a popular movie, but there's a moral cost here. What if The Dark Night had never happened and that $100M had been put to use for a good cause, like orphanages, stem cell research, saving 10K jobs at GM, or whatever. Is that worth more than $100M in the long run? Probably. Yes, I know I'll probably get shafted for saying this, but I for one would have gladly traded the film for one of these. OK, too much of an offense? Then how many people would have traded the last Indiana Jones movie, instead? Still too offensive? OK, how about King Kong? My point is that sooner or later the ridiculously obnoxious price-tags of many of these movies will hit home. We'll probably still have some successes, but we'll also have more Waterworlds.

And what if that money had been dumped into wars or funding narco terrorists (and isn't that what recreational drug use essentially does)? There's multiple sides to every presumption over where resources are supposed to go, and what represents a "good cause." Fact of the matter is that the movie industry in itself is an employment center that generates jobs and supports people who can in turn use their income on whatever they consider "good causes."

And your rant here once again ignores the point that I was making, which is if you cut out the most lucrative revenue sources from a movie or TV production, then what pays for the programs? And if you choose to put a movie into a freeware/open source market, then how do you replace the $1 billion in ticket sales on a hit movie like The Dark Knight? Movies are not made for free y'know.

What you consider "ridiculously obnoxious" price tags, the studios consider an investment. All you have to do is look at which movies make the most money, and generate the highest return on investment. The movie industry ain't a charity, and the buying public ain't saints. Whatever they don't spend on movies would go towards other diversions, worthy or artistic or otherwise.

[Mr Peabody]

We don't watch TV any more in favor of making shadow characters on the wall using a desk lamp as projector. I'm sure some of those recreational drugs would enhance the experience but for now it's just imagination or insanity.

[pixelthis]

We don't watch TV any more in favor of making shadow characters on the wall using a desk lamp as projector. I'm sure some of those recreational drugs would enhance the experience but for now it's just imagination or insanity.

Sounds better than some of the network fare out there.
You know, the nets are getting slammed just like everybody else, which means more and more cheap reality BS and cutting the budget on remaining shows.
Its fun watching the budget effects on current shows.
Knight rider, a guilty pleasure, used to have a huge base with a bunch of geeks,
a security chief, etc. Looked great in HD.
Then an older version called KARR came in and killed half the cast and burned out the HQ.
Now its a couple of geeks with a few laptops, and the background is mostly dark.
Meanwhile, Deal or no Deal has just disapeared.
Howie Mandel is working out his contract on "Howie does it", a mediocre candid camera rip off.
This keeps up, pretty soon you're gonna turn on the tube and see nothing but hand
puppets(which would be an improvement sometimes)

[Mr Peabody]

FOX has some good stuff still. 24 came back with a very good season. I started getting into Terminator the Sara Connor Chronicles. Now that I have a friend of mine told me they are slated to be cancelled. A couple of their other shows look interesting but I only have so much time. My wife is into House. I watched a couple with her and it wasn't bad but after a few shows you see the formula.

Any way Pix where have you been lately? You haven't invaded another forum have you?

[pixelthis]

FOX has some good stuff still. 24 came back with a very good season. I started getting into Terminator the Sara Connor Chronicles. Now that I have a friend of mine told me they are slated to be cancelled. A couple of their other shows look interesting but I only have so much time. My wife is into House. I watched a couple with her and it wasn't bad but after a few shows you see the formula.

Any way Pix where have you been lately? You haven't invaded another forum have you?

Nope, just dont have anything new to contribute, so I just respond to others posts.
And of course they are canceling the terminator, its one of the best on TV.
The two parter concerning the USS JIMMY CARTER was inspired.
Butu the world is in a mess, I CANT AFFORD ANY NEW TOYS,
the govt morphed into a collectivised state overnight, with almost daily broadcasts
from maximum leader, real life is all of a sudden a lot more interesting than any movie.
One thing that is paticulary distressing is that I HAVE LOST MY MUSIC.
In my teens I hardly watched movies and TV, too busy, and times have come where I couldnt focus long enough to get into any kind of film.
But I have always loved music, and its gotten me thru some hard times.
And I STILL LIKE IT, tune into palladia, etc, but just sitting and listening to music
has fallen by the wayside for some reason.
I have a lot of new music that I have only listened to a few times, great stuff,
but my mind wanders.
Music is what gets me thru hard times, times have to be very hard to distract me from something I have loved for fourty years.
Dont know if its an age thing or what.
With stores closing right and left, friends getting the axe, it just seems kinda trivial somehow.

[nightflier]

It's free only because it leads to somewhere else that does have a revenue stream, and in the meantime, all the traffic to the site builds up the equity value of the site. It leaves NBCU with multiple options, all of which they can make money off of.

That's still only speculation. They have as yet not made any changes to the formula and are still only generating revenue through ads. Nothing has changed yet and I haven't seen any evidence of the bait-n-switch you're talking about.

Again, you're trying to jam this open source analogy into a market that's inherently protective of its intellectual property.

Maybe it's time people actually paid attention to Open Source. It has gained considerable momentum in the last year. Just because the audio-video market is so protective of IP, doesn't mean it's going to be able to keep it up. I'm seeing quite a bit of evidence that suggests that the profit model they've relied on only works in isolated markets. Moreover, the effort to protect these markets isn't succeeding: P2P is still growing, DRM-free initiatives are also growing, there's considerable interest in projects like CAFE, the Open Audio/Music License, and the Open Video Project. Likewise, piracy, for all it's evils is still the most popular source of music and video. For example, something like 99% of all music in China is pirated and they represent not only 1/4 the world's population, but also the largest number of internet users of any country. I'd say that the defense of IP is very much threatened.

How can something like Hulu spin off into an open source project if the programming is all held under lock and key by the rights holders? It's nothing more than another YouTube clone without programming.

I'm talking about the interface. As popular as it is, it will either be spun off, open-sourced or copied. As far as programming, Hulu could still allow other companies and products, even open source ones, access to its servers where the programming resides. Since the programming includes the ads, they would still be getting paid.

NBCU is looking for cash flow, because the potential is there. Like I said before, NBCU is shopping Hulu around to the cable/satellite companies because there's a buck to be made there, and mutual interest on both sides. Cable/satellite companies need to keep their paid customers from canceling service, and NBCU has a media property that can give the cable/satellite companies that incentive and increase the revenues over what they receive from those service providers.

Even if a cable/sat provider did sign-on, I doubt that they would be able to charge extra for it, since it's offered for free on the web. Again, the only revenue stream there is ads, as I've said before.

Nope. You're ignoring the market information that I posted, which indicates that in recessionary times, people will spend more on entertainment options that are close to home. They will spend more on movies, and spend more on their satellite/cable TV, while spending less on other things. Notice how computer sales have plummeted?

You're only pulling from the data that which supports your argument. It's also true that in recessionary times people opt for the less expensive movies, less expensive equipment, and less expensive rental options. The "rise" that you're referring to is actually at the expense of the next more expensive option, and not necessarily an independent rise in a particualr segment of the market in isolation. Additionally, if one of these less expensive options is downloads, then that's what people will choose.

People who choose Hulu are those few that actually want to watch TV programs through their computer. Why do I say few? Well, an academic study that just came out last week indicated that when tracking people's actual viewing habits, the study found that more than 98% of TV program viewing is still done while watching TVs (rather than computers or portable devices), and more than 75% of TV program viewing is done while watching LIVE TV rather than recordings. The conclusion of that report is that viewing preference surveys that do not track TV program viewing in real time, have grossly overestimated the actual demand for on-demand TV, PPV, downloading, and online streaming. And this finding is very consistent with the market data that shows things like Blu-ray sales growth and revenues far outpacing downloads and PPV options.

What study is that? I'm curious because I have a hard time believing such high numbers. I'm going to guess that the survey pool was highly selective. Also, what was the criteria for measuring on-demand TV, PPV, downloading, and streaming? Sales? If so, then I would seriously question the information. I'm not saying what you're stating isn't true, but let's see what study you're referring to before we proceed.

How are movie budgets out of line with "the world we now find ourselves in" if movie attendance has gone way up as the economy has gone south?

What do you mean by "way up"? Put a figure behind that, because one thing that's also gone way up is the price of admission, parking, & snacks. $11.50 for a matinee here in SoCal, $4 for a bottle of Aquafina inside, and that's all my wallet had the stomach for last time I went.

It costs a lot more to go to a sporting event than a movie, and it's the higher priced entertainment options that have gotten hit the hardest.

In the last few economic downturns, sports event attendance went up, this time it didn't. That's all I'm saying. And I also don't agree that sports is a higher-priced form of entertainment since attendance at college and high-school events is also way down. There's something else going on here, and I don't know what that is, but it's not just because sports is a higher-priced form of entertainment.

You can hypothesize that movies "will get there too," but that's nothing more than an uneducated guess that goes against the actual revenue data and the historical trends where movie attendance tends to spike during recessions.

Sports attendance used to go up too. So why should movies not get hit with the same drops? Attendance at concerts, plays, and musicals is also down. You say that movie attendance is up, but I have a hard time believing it and I certainly don't see any evidence of that at my local theaters. Maybe the first couple of weeks the movies are well attended, but the wife & I were the only ones watching a matinee of Watchmen this past week. Granted it was on a weekday, but we had the whole theater to ourselves - maybe it was the high price of the ticket?

Fact of the matter is that the movie industry in itself is an employment center that generates jobs and supports people who can in turn use their income on whatever they consider "good causes."

Nice libertarian viewpoint. But I'm still of the opinion that just because a movie like The Dark Knight broke even or even makes a big profit, that doesn't change the morality of such an obscene outlay of cash. You're only looking at one side of this equation. If the movie had never been made, something like $200-300M would have been saved in producing it, but more importantly, another $300-400M in sales revenue would also have been saved if the movie indeed was profitable. Add to that another $200M for royalties down the line, and pretty soon you're up to $1B of cash outlay. Yes, all those talented people who worked on it would probably have to work on other projects, but the sum total of their salaries is hardly comparable. So what could we as a society do with an extra $1B? Well, I guess for our American rich tastes, maybe not much, but that's not exactly small change either.

And your rant here once again ignores the point that I was making, which is if you cut out the most lucrative revenue sources from a movie or TV production, then what pays for the programs? And if you choose to put a movie into a freeware/open source market, then how do you replace the $1 billion in ticket sales on a hit movie like The Dark Knight? Movies are not made for free y'know.

$1B in ticket sales. Hmmmm, I'll have to revise the previous paragraph, then.

Movies aren't made for free, no. But they can be made for less. For starters we could cut out executive bonuses and salary raises for the CEOs in charge of this racket. Then we could pay lead actors more equitably with secondary actors. As far as the technology and special effects, maybe those industries shouldn't be so vertical and reliant on proprietary products and services. That's right, they could use a good dose of competition, remember that old Republican concept? If Slumdog Millionaire can do it for a fraction of the budget of The Dark Night and still get more academy awards, maybe it is possible to create good movies without the high cost. Maybe the reason that costs have risen so high is because it's part of a formula of expectations based more box-office sales than any real figure for expenses? Maybe the "cost" of such a movie is entirely artificial. Wouldn't that be a kick in the pants?

What you consider "ridiculously obnoxious" price tags, the studios consider an investment. All you have to do is look at which movies make the most money, and generate the highest return on investment. The movie industry ain't a charity, and the buying public ain't saints.

An investment? In what? 2 hours of entertainment? Yeah, that's one heck of a productive use of billions of dollars. Way to invest for the future. As I've said elsewhere, sometimes it isn't so much about huge profits as it is about basic subsistence. For many people in this country, unmitigated profit is their only reality and they just can't fathom anything else. Unless it is carefully deflated, this bubble too will burst. No one can predict when, but we can all agree that it will. The expectant growth and the consequent lifestyle associated with it simply are not sustainable.

So will you take the blue pill or the red one?

[Woochifer]

That's still only speculation. They have as yet not made any changes to the formula and are still only generating revenue through ads. Nothing has changed yet and I haven't seen any evidence of the bait-n-switch you're talking about.

Did you even bother to read the article that I linked? It's not speculation because talks are ongoing, and this has been reported on. NBCU has already been in talks with the major cable and satellite companies. And I just read an article indicating that NBCU is negotiating with ABC/Disney about taking an equity stake in Hulu. Think that this is some open source initiative, and not a business venture that's puts a hard and cold focus on the bottomline? Think again.

Maybe it's time people actually paid attention to Open Source. It has gained considerable momentum in the last year. Just because the audio-video market is so protective of IP, doesn't mean it's going to be able to keep it up. I'm seeing quite a bit of evidence that suggests that the profit model they've relied on only works in isolated markets. Moreover, the effort to protect these markets isn't succeeding: P2P is still growing, DRM-free initiatives are also growing, there's considerable interest in projects like CAFE, the Open Audio/Music License, and the Open Video Project. Likewise, piracy, for all it's evils is still the most popular source of music and video. For example, something like 99% of all music in China is pirated and they represent not only 1/4 the world's population, but also the largest number of internet users of any country. I'd say that the defense of IP is very much threatened.

Again, coulda woulda shoulda. Wishful thinking and ideologically driven opining about how people SHOULD behave isn't going to change how they ACTUALLY behave.

Even if a cable/sat provider did sign-on, I doubt that they would be able to charge extra for it, since it's offered for free on the web. Again, the only revenue stream there is ads, as I've said before.

Yep, looks like you ignored the article as well as 3/4 of what I've been writing on this topic. The cable/satellite companies are negotiating with NBCU to have certain sections of their web content made exclusively available to their subscribers. The revenue stream here would be an increase in the access fees that cable and satellite operators ALREADY PAY to NBCU and its affiliates.

For cable/broadcast networks, it's not just the ads that generate revenue. Cable companies pay access fees to carry the most popular networks and local network affiliates charge carriage fees for rebroadcasting OTA signals as well. Those are added into the monthly charges. For example, every month, Disney collects about $4 from each basic cable and satellite subscriber for access to ESPN (USA, Sci-Fi, and some of NBCU's other networks I recall account for $1 or less per subscriber every month). If Hulu begins to wall off their content for cable/satellite subscribers, then the revenues would come from that revenue stream. No different than how cable channels operate right now.

You're only pulling from the data that which supports your argument.

No, I'm pulling the data that reflects actual shifts in consumer behavior, and how that behavior is reflected in dollars and cents.

The "rise" that you're referring to is actually at the expense of the next more expensive option, and not necessarily an independent rise in a particualr segment of the market in isolation. Additionally, if one of these less expensive options is downloads, then that's what people will choose.

That's a presumption that has no basis on actual market behavior. The recessionary shifts have always gone towards options closer to home. Downloading is a niche activity.

What study is that? I'm curious because I have a hard time believing such high numbers. I'm going to guess that the survey pool was highly selective. Also, what was the criteria for measuring on-demand TV, PPV, downloading, and streaming? Sales? If so, then I would seriously question the information. I'm not saying what you're stating isn't true, but let's see what study you're referring to before we proceed.

Your computer-centric biases are blinding you to how the rest of the world actually watches TV -- through TVs. The study came out of Ball State, and I read portions of it out of TV Week magazine. Like I said, it's findings are consistent with the other market data that's out there. All of the other studies I've seen about people's viewing preferences are flawed in that they do not track actual viewing behavior in real time. This new study is based on real-time viewing.

If you want an illustration of this, just look at your favorite example. Hulu is claiming that this season, they've served up over 100 million TV episodes. Sounds impressive until you realize that this viewership doesn't even equal the season-long viewing audience for ONE lowly rated network TV series.

Consider that 24 has an average weekly viewing audience of 11 million. Over the course of the entire season, that adds up to an aggregate audience of more than 260 million viewers. 24 ALONE more than doubles the ENTIRE audience that Hulu has attracted this season. And the audience from just five episodes of Dancing With The Stars or three episodes of American Idol is already larger than the cumulative season audience for Hulu.

Aggregate this even further to demonstrate just how big an audience the broadcast networks still have, compared to Hulu. NBC, ABC, and CBS each have 22 weekly hours of prime time programming. Fox and CW each have 15 hours. That's five major broadcast networks with a total of 96 hours of prime time programming every week.

Now, you figure that an average prime time show has an audience of about 8 million weekly viewers. Multiply that out over 96 hours per week, and multiply that out from September through March, and you have a cumulative total of 18.4 billion hourly episodes "served." Hulu's ~100 million or so episode views equals about 0.5% of the total broadcast audience. And this doesn't even account for the number of people who only caught a portion of an episode, or who looked at the many news clips and other short features that Hulu also hosts. This is why I say that TV viewing study is consistent with the actual market data, because it is.

What do you mean by "way up"? Put a figure behind that, because one thing that's also gone way up is the price of admission, parking, & snacks. $11.50 for a matinee here in SoCal, $4 for a bottle of Aquafina inside, and that's all my wallet had the stomach for last time I went.

In February, I recall that the weekly box office figures were consistently coming in more than 20% ahead of last year. And the more impressive aspect of the box office performance is that it's not just one or two high profile releases driving the numbers. Even after accounting for ticket price increases, the number of tickets sold are running well ahead of last year.

In the last few economic downturns, sports event attendance went up, this time it didn't. That's all I'm saying. And I also don't agree that sports is a higher-priced form of entertainment since attendance at college and high-school events is also way down. There's something else going on here, and I don't know what that is, but it's not just because sports is a higher-priced form of entertainment.

Sports attendance has been tracking with the economy since the 80s when the ticket price escalation began. Right now, the average ticket price for a baseball game is more than $20, more than $50 for an NBA game, and more than $70 for an NFL game. And that's before you get to the parking and concessions. The ticket price escalation for sporting events has run far ahead of the movies. For one thing, the live attendance for sporting events is a lot lower than movies.

Sports attendance used to go up too. So why should movies not get hit with the same drops? Attendance at concerts, plays, and musicals is also down. You say that movie attendance is up, but I have a hard time believing it and I certainly don't see any evidence of that at my local theaters.

Because movies remain a bargain compared to those other entertainment options you listed. When was the last time you actually went to a major concert or theater production? Concert tickets now typically hover around $50 to $100, ticket prices for major theater productions are in that same price range. Even the most expensive movie tickets remain less than $15. It's concerts, live theater, and sporting events that are getting hammered the hardest because of this.

Maybe the first couple of weeks the movies are well attended, but the wife & I were the only ones watching a matinee of Watchmen this past week. Granted it was on a weekday, but we had the whole theater to ourselves - maybe it was the high price of the ticket?

No, it's just the typical frontloaded attendance trends for movies. Check a site like Box Office Mojo, and you'll see that most movies will grab between 25% to 50% of their TOTAL ticket sales during the first weekend of release. A movie will typically lose at least 40% of its audience between the first and second week. Watchmen lost more than 65% of its audience between the opening week and the second week.

Nice libertarian viewpoint. But I'm still of the opinion that just because a movie like The Dark Knight broke even or even makes a big profit, that doesn't change the morality of such an obscene outlay of cash. You're only looking at one side of this equation. If the movie had never been made, something like $200-300M would have been saved in producing it, but more importantly, another $300-400M in sales revenue would also have been saved if the movie indeed was profitable. Add to that another $200M for royalties down the line, and pretty soon you're up to $1B of cash outlay. Yes, all those talented people who worked on it would probably have to work on other projects, but the sum total of their salaries is hardly comparable. So what could we as a society do with an extra $1B? Well, I guess for our American rich tastes, maybe not much, but that's not exactly small change either.

So, I take it then that you did not see The Dark Knight and will boycott it via every channel that it's shown in for morality's sake? If you're going to get all sanctimonious about the morality of all the revenues that a hit movie like TDK generates, then the only way to slay the beast is to not feed it. If any of your hard earned money got pitched in Warner's direction or you caught any showings on TV or rented the movie, then you're just a part of the problem that you described.

Movies aren't made for free, no. But they can be made for less. For starters we could cut out executive bonuses and salary raises for the CEOs in charge of this racket. Then we could pay lead actors more equitably with secondary actors.

Right. So, Warner should have just recast The Dark Knight with a new actor, new director, and new screenwriter just to lower costs, despite the fact that the Batman Begins team was largely responsible for that movie's success? Christopher Nolan and Christian Bale were paid relatively low salaries for Batman Begins, but once that movie became a success and created a buzz for The Dark Knight, then their salaries went up. And I say, what's wrong with that? The studios pay higher salaries for lead actors, directors, etc. when they perform at the box office, and in Hollywood, you're only as good as your last hit. The minute an actor or director begins to flop at the box office, then their salary nosedives, or they don't work at all.

As far as the technology and special effects, maybe those industries shouldn't be so vertical and reliant on proprietary products and services. That's right, they could use a good dose of competition, remember that old Republican concept?

As usual, you have try and squeeze your ideological pegs into the odd-shaped holes. For the effects, the expense has little to do with whether they use proprietary or open source software, it's the thousands of man-hours required to do the digital compositing, rendering, etc. The salary for a digital animator is a helluva lot more than the cost of his/her workstation. And there's already plenty of competition among the effects houses, who will do work at different levels. Just look at the credits for any movie that uses a lot of effects shots, you might notice that the work is typically spread across multiple effects studios.

If Slumdog Millionaire can do it for a fraction of the budget of The Dark Night and still get more academy awards, maybe it is possible to create good movies without the high cost.

Yuh, and how many other low budget movies didn't win any academy awards? Just because something is low budget doesn't mean it's any good either.

Maybe the reason that costs have risen so high is because it's part of a formula of expectations based more box-office sales than any real figure for expenses? Maybe the "cost" of such a movie is entirely artificial. Wouldn't that be a kick in the pants?

Costs have risen so high because audiences are expecting a higher level of production value than before. Even if you account for escalations of salaries for the directors, actors, and producers, the rest of the costs for making movies have also gone up. Assuming that you support organized labor, you know that the film industry is one of the most unionized economic sectors out there, don't you? Are you going to blame the actor, screenwriter, film editor, cinematographer, director and/or laborer unions for successfully negotiating generous contracts with the studios?

An investment? In what? 2 hours of entertainment? Yeah, that's one heck of a productive use of billions of dollars. Way to invest for the future. As I've said elsewhere, sometimes it isn't so much about huge profits as it is about basic subsistence. For many people in this country, unmitigated profit is their only reality and they just can't fathom anything else. Unless it is carefully deflated, this bubble too will burst. No one can predict when, but we can all agree that it will. The expectant growth and the consequent lifestyle associated with it simply are not sustainable.

Warner's INVESTMENT was not $1 billion, that billion was the RETURN. Of course, film making is an investment, since it's not a charitable activity, the parties that front the money to make the movies are expecting to at least get their money back.

So what are you saying then, that all of us should collectively eschew all notions of entertainment and diversionary activities in full-time service of the greater good? I mean, if you're all about trying to preach the morality of more worthy pursuits in lieu of going to the movies, then why are you still supporting this industry with your hard earned money? If you're so concerned about "basic subsistence" then why are you spending money on home theater equipment, and not donating all of it to a more worthy cause?

[Kevio]

Am I the only one who does not read long tit-for-tat-posts? Seriously, carry on. I hope you guys are enjoying yourself, whatever you're talking about.

[nightflier]

Kevio, I'm gona try:

Wooch, yes I read your posts. The bait-n-switch I was talking about is if they start charging for the stuff that's currently being offered for free on their website. If they do, Hulu's viewership will fall considerably and people will find other sources, even semi-legal ones. The reason it's popular is because it's free. If they get onto set-top boxes, then I'm not convinced people will pay a premium for the service. And if they do charge more, then it can't be excessive because alternatives like Tivo (who have been at it a lot longer) should keep prices low.

I saw Batman begins specifically because it had Christian Bale & Liam Neeson in it, and frankly I thought it was OK, but nothing to rant about either. Same old batman story - it's getting kind of tired, but I guess for the rest of the public that kind of rote repetition with lost of explosions is worthy of another $10-15 a ticket. Fine, but not for me.

I do donate a considerable amount to several charities that I've been supporting for years, more than most people, I'm going to guess. Granted, I've had to scale that back this year, but I'm making up for that in volunteering more. Anyhow, that's none of your business so get off my back about it. I do live by my principles as best I can, even if I did see a few Batman movies - nobody's perfect.

I also would like to read that study from Ball State. I don't think it's as black & white as you make it. How exactly did they do the real-time data collecting? Who where the subjects? How large was the pool? One thing I do know is that when people have a box inside their home that tracks their viewing, they change their viewing patterns because of it - that's just basic psychology. I have lots of other questions, but I don't want to loose Kevio.

You argument about the pay scales in movies only goes so far. Yes, I'm quite aware that it is one of the most unionized industries, and that is a good thing for the people in it. That said, there is still a tremendous disparity between the CEOs and the people at the bottom of the credit listings who often work themselves to the bone just to make ends meet.

No idelogical pegs from my end. I would argue you are the one stuck in static ideologies. I specifically said "products AND services." Yes, there is competition there, but it's very limited. Studios will typically stay with the same service providers over time, or keep to a small group they have a relationship with. This industry could definitely have more input from a larger pool of service providers. And as far as equipment, you know as well as I do that the studios use extremely proprietary audio and video gear that has little to no competition. Much of this problem is also marred in cross-national tariffs and protectionist policies.

You are also not reading my posts very carefully, either. I didn't say that TDK and other uber-expensive movies should go away, I'm saying that this economy will whittle the number of them down, especially when less expensive movies can generate good box-office revenues (and awards), too. That's just economics.

Major sporting events and concerts may cost a bit more, but your argument still doesn't explain why minor ones have also seen attendance go way down. I can go to a jazz club down the freeway and see a great show for about $15. In addition I can clearly see when I'm there that attendance is way down from a last year. I have a friend who owns a pub and he also says that attendance during sports nights and happy hour is way down. These are average American pass-times that cost much less, but people are not going as much. My guess is that the argument about cost is only a part of the reason.

Long story short, if Hulu pulls the bait-n-switch, then people will find alternatives. And getting back to the original topic, Blockbuster going away is not something I consider a good thing because that reduces competition and consolidates control over access to movies. This type of consolidation has never been a benefit to the consumer in the long term.

[Mr Peabody]

Myself, I never paid to watch a movie on PPV. However, I have watched stuff via On Demand that was free. When I had cable they were to stupid to know whether the movie was in 5.1 and now HD, so I went for the sure thing on DVD. IF, I knew the quality was there, AND, IF, they ever had a movie I was interested in watching I possibly might have used the service.

Whether a movie cost $1 million or $100 million the ticket price is the same. It has been well publicized though that box office movie ticket sales have been top levels.

Just random thoughts

[pixelthis]

Myself, I never paid to watch a movie on PPV. However, I have watched stuff via On Demand that was free. When I had cable they were to stupid to know whether the movie was in 5.1 and now HD, so I went for the sure thing on DVD. IF, I knew the quality was there, AND, IF, they ever had a movie I was interested in watching I possibly might have used the service.

Whether a movie cost $1 million or $100 million the ticket price is the same. It has been well publicized though that box office movie ticket sales have been top levels.

Just random thoughts

My "on demand" has a section for HD, and a section for free HD movies.
The HD fare is usually in 5.1.
A while back the Bond movies were all in HD, and free.
Looked and sounded fantastic.
Couldnt beat the price, anyway.
So who is going to go to the trouble of going to Blockbuster to rent a 007 movie
in SD when you can get the HD version on cable for free?
Maybe teh same people who pay for Radio.

[Mr Peabody]

AT&T Uverse is invading the city slowly but surely so some day maybe we will have modern cable.

[Woochifer]

Wooch, yes I read your posts. The bait-n-switch I was talking about is if they start charging for the stuff that's currently being offered for free on their website. If they do, Hulu's viewership will fall considerably and people will find other sources, even semi-legal ones. The reason it's popular is because it's free. If they get onto set-top boxes, then I'm not convinced people will pay a premium for the service. And if they do charge more, then it can't be excessive because alternatives like Tivo (who have been at it a lot longer) should keep prices low.

Where do I indicate that they will charge for the site? Try reading what I say, rather than jump to conclusions. The deals in discussion have nothing to do with charging for access to the site, they will simply make certain sections of the site available only to people who subscribe to cable and/or satellite services. (Not much different than ESPN360, which cannot be accessed for any price if you don't have the right ISP) If anything, I would guess that this has to do with accessing certain features, and allowing for full-time access to live network feeds -- something that Hulu does not currently have.

And no, the reason why the site is popular is because of the CONTENT that it carries for free. There are plenty of sites that serve up free video, but most of it is crap that's not worth the time or effort to most people.

I do donate a considerable amount to several charities that I've been supporting for years, more than most people, I'm going to guess. Granted, I've had to scale that back this year, but I'm making up for that in volunteering more. Anyhow, that's none of your business so get off my back about it. I do live by my principles as best I can, even if I did see a few Batman movies - nobody's perfect.

None of my business? Well, you're the one that's getting all self-righteous and sanctimonious about how people and companies should be directing their time and money. If you bemoan how much money flows to the movie studios, then the simplest solution is to lead by example. That's all I'm saying.

I also would like to read that study from Ball State. I don't think it's as black & white as you make it. How exactly did they do the real-time data collecting? Who where the subjects? How large was the pool? One thing I do know is that when people have a box inside their home that tracks their viewing, they change their viewing patterns because of it - that's just basic psychology. I have lots of other questions, but I don't want to loose Kevio.

Nope, the study was done the old-fashioned way -- with a diary marked off in 30-second increments. You can question the validity of the study all you want, but my numerical exercise on how Hulu's TOTAL viewership is eclipsed by just ONE low-rated network program indicates that the study's conclusions are consistent with all of the market data. None of the other articles I've seen on viewing preferences track actual behavior.

You can claim some bias that people change their viewing patterns if they know they're being tracked. But, the results are still more accurately reflective of actual behavior than a one-off survey asking people if they plan to watch TV using their computer. And that's the kind of agenda-driven nonsense that I see pushed by the tech press time after time. They've been blathering on about the imminent arrival of the digital convergence for the better part of 20 years. Yet, nothing happening on the market indicates that this repeatedly deferred vision will finally happen anytime soon. (I mean, for all the hype that music downloading gets, the lowly CD continues to generate more than 70% of the actual revenue for the music industry)

You argument about the pay scales in movies only goes so far. Yes, I'm quite aware that it is one of the most unionized industries, and that is a good thing for the people in it. That said, there is still a tremendous disparity between the CEOs and the people at the bottom of the credit listings who often work themselves to the bone just to make ends meet.

Sure, there's a tremendous disparity, but even the highest paid stars and studio heads don't make up the majority of the budget or budgetary increases on a movie. The people who work behind the scenes in the industry get paid very well on an hourly basis because they're out of work whenever a movie or TV production wraps up. Acting is one of the lowest paying positions on an annualized basis because most actors in the guild are out of work at any given time. But, when they work, they get paid very well.

No idelogical pegs from my end. I would argue you are the one stuck in static ideologies. I specifically said "products AND services." Yes, there is competition there, but it's very limited. Studios will typically stay with the same service providers over time, or keep to a small group they have a relationship with. This industry could definitely have more input from a larger pool of service providers. And as far as equipment, you know as well as I do that the studios use extremely proprietary audio and video gear that has little to no competition. Much of this problem is also marred in cross-national tariffs and protectionist policies.

It's not a static ideology in that I base my opinions on what the actual market data is saying about the direction of an industry. I prefer objectivity over ideology when looking at market trends. An ideologically driven opinion is one that ignores the actual behavior and substitutes wishful thinking about how what other people SHOULD be doing, as opposed to what they actually do.

As far as the service providers go, there are literally thousands of them all over Hollywood, Vancouver, Hong Kong, NYC, and any of the other major production centers. Some of the production equipment is highly specialized, like the cameras and audio equipment. But, the people who operate it and serve the back end of film production are employed in any number of different companies. You want more competition with the equipment, but how big a market is actually there for the hardware itself? Consider that Hollywood puts out about 300-400 movies a year -- you think that there should be hundreds of camera manufacturers vying for those contracts? I mean, still photographers mostly work as freelancers, yet there's only a handful of camera manufacturers that serve the professional market. And even in the much larger consumer market, there's only a handful of manufacturers that actually make cameras.

With the effects and editing houses, they're all using relatively generic computer equipment nowadays. In the old days, you needed a dedicated SGI or Avid workstation with specialized hardware just to perform the function. Desktop PCs were not powerful enough. Now they are, and a lot of them are running open source operating systems. But, as I said, the production cost is not in the hardware or the software, but in the man-hours that it takes to do the actual work. You can speculate all you want about imaginary cost savings that would come about if only people would work on nonproprietary systems. But, that's a drop in the bucket compared to the thousands of man-hours needed to make a movie.

You are also not reading my posts very carefully, either. I didn't say that TDK and other uber-expensive movies should go away, I'm saying that this economy will whittle the number of them down, especially when less expensive movies can generate good box-office revenues (and awards), too. That's just economics.

I know you didn't say they should go away, because that's not what I wrote. You were basically saying that they could be made on the cheap, and I simply outlined reasons why that's a short-sighted view in a market that's driven by audience expectations regarding the production value, directors, and lead actors. Cheap out on all that stuff, and the audience will stay away in droves.

Less expensive movies can indeed generate good box office revenues, but they can and will also flop. Time and time again, the movies that top the box office returns are the big tent pole projects. If anything, studios that string together a series of box office flops will cut out their lower budget projects first, because large-scale blockbusters are often lower risk ventures, given their built-in audience, how they attract additional investors, overseas markets, and ancillary income from broadcast and merchandising rights. The returns from a big hit like The Dark Knight keeps those smaller scale projects in the pipeline.

Major sporting events and concerts may cost a bit more, but your argument still doesn't explain why minor ones have also seen attendance go way down. I can go to a jazz club down the freeway and see a great show for about $15. In addition I can clearly see when I'm there that attendance is way down from a last year. I have a friend who owns a pub and he also says that attendance during sports nights and happy hour is way down. These are average American pass-times that cost much less, but people are not going as much. My guess is that the argument about cost is only a part of the reason.

Major sporting events and concerts cost WAY more than movies. Even during good times, people go to movies more often than they do concerts or sporting events, because it's more ubiquitous and it's less expensive. And in bad times, consumers cut back on the "occasion" outings and focus more on recurring outings that are close to home. People still eat out, except that in bad times they go out for fast food rather than sit down dining. History bears this out, as movie attendance goes up during recessions.

Moviegoing is something that the average person does on a regular basis. I forget the exact figure, but the average American goes to the movies more than once per month. Jazz club outings are a regular outing only for a select few hardcore fans -- it's a special occasion to just about everybody else. Otherwise, you'd see just as many jazz clubs as movie theater screens.

Long story short, if Hulu pulls the bait-n-switch, then people will find alternatives.

And like I keep telling you, the viability of those alternatives depends on CONTENT, which is something that Hulu has, and other video streaming options don't. Hulu's market grip would tighten even further if ABC/Disney comes on board. That would give Hulu control over the online streaming for 3 out of the 5 major broadcast networks, as well as the cable network content from NBCU, Fox, and ABC/Disney.

And getting back to the original topic, Blockbuster going away is not something I consider a good thing because that reduces competition and consolidates control over access to movies. This type of consolidation has never been a benefit to the consumer in the long term.

And I don't think Blockbuster is going away, and if they do, there will be likely be other options to take its place. 5,000+ stores and more than $5 billion in revenues is nothing to sneeze at (consider that combined ticket sales for movie theaters last year was $9.6 billion). They need to downsize, but their revenue totals show that there's still a sizable amount of demand for what they offer.

Tech blogger Don Reisinger, whom I normally regard as an idiot (he basically claims that Blu-ray is dead because he can't tell the difference between an upconverted DVD and a Blu-ray), wrote that the new Blu-ray pricing structure on Netflix actually makes renting from Blockbuster a better deal. I'm not a Netflix subscriber, so I don't know the particulars. But, I have been reading some grumblings about Netflix's changes to their Blu-ray pricing.

Meanwhile, Blockbuster is now heavily promoting Blu-ray, and seems to have found a new way of getting preferential treatment from the studios. My understanding is that they've secured some favorable deals with the studios by carrying special "movie only" Blu-ray versions that are not sold at retail stores. I would guess that the studios love this because stripped of the special features, it gives further incentive for consumers to buy the Blu-ray if they find that they like the movie. If this Blu-ray arrangement is anything like the old revenue sharing deals they got during the VHS era, then it potentially provides a huge boost to Blockbuster's bottom line. And even if it's just offering Blockbuster these movie-only BDs at a reduced cost, it still helps their bottomline AND gives them incentive to further expand their Blu-ray offerings.

[Mr Peabody]

From what I understand Netflix is like that as well, you have to be a member to access On Demand. So not just anyone with a Samsung 2500 can start watching.

How does this work, if I had a large database of movies can thousands of people watch one at the same time or would there have to be thousands of copies, one for each viewer? Can several computers read one file at the same time?

What brings this to mind is a possible advantage to download if it ever got the quality, speed and bandwidth up to snuff. I think everyone has gone to the video store with renting that new release only to find all the copies gone already. But what if we could have access to the hottest new release and never have to worry about it being gone before we get there. I usually buy movies I like anyway but prefer to view them first.

I actually got to participate in a Neilson survey once. They paid us a dollar. It was in the early 80's and we had a gizmo that hooked to the TV. I can't remember what my thoughts were on viewing but I don't think I changed my habits. That would be stupid. It stands to reason that if some one was watching what I watch, I would watch my normal shows in order to get them ratings so they can stay on TV. Hey, if you guys are reading this I'm watching my Sarah Connors episodes over and over, even the commercials. What about one more season?

[nightflier]

The deals in discussion have nothing to do with charging for access to the site, they will simply make certain sections of the site available only to people who subscribe to cable and/or satellite services. (Not much different than ESPN360, which cannot be accessed for any price if you don't have the right ISP) If anything, I would guess that this has to do with accessing certain features, and allowing for full-time access to live network feeds -- something that Hulu does not currently have.

Semantics Wooch. Right now Hulu doesn't have any special sections to their site. If they pull an ESPN360-style bait-n-switch, people won't buy into that. It's that simple. There is a tradition with the internet community that expects free content, especially from companies that offered it before. If they change their policy and switch from freeware to shareware (for lack of better terms), people will avoid them and find alternatives. Yes, a few people will subscribe, but most won't, that's how it's always been. And for those cable/box subscribers who will suddenly have Hulu on their computers, you said yourself, cable/box remote-users are not computer users - different market, right?

And no, the reason why the site is popular is because of the CONTENT that it carries for free. There are plenty of sites that serve up free video, but most of it is crap that's not worth the time or effort to most people.

And that content is free. Again, semantics.

None of my business? Well, you're the one that's getting all self-righteous and sanctimonious about how people and companies should be directing their time and money. If you bemoan how much money flows to the movie studios, then the simplest solution is to lead by example. That's all I'm saying.

And I'm telling you that I am trying to live by example. And it's still none of your business.

Nope, the study was done the old-fashioned way -- with a diary marked off in 30-second increments. You can question the validity of the study all you want, but my numerical exercise on how Hulu's TOTAL viewership is eclipsed by just ONE low-rated network program indicates that the study's conclusions are consistent with all of the market data. None of the other articles I've seen on viewing preferences track actual behavior.

Maybe they should.

You can claim some bias that people change their viewing patterns if they know they're being tracked.

They do. It's simple psychology. At least for most people, sorry Mr.P. For example, if Joe Six Pack regularly watches 15 hours of porn during a typical week. Do you really think he'll be doing that if there's a little red light that blinks from a little recorder on top of his TV? I seriously doubt that. And while that's just an example, I'm pretty sure this goes for milder forms of socially less popular viewing too. Maybe Jerry Springer / UFC / America's Next Top Model won't figure as high on his list that week because he doesn't want big brother to think he's that much of a simpleton. Even Joe Sixpack has a conscience.

But, the results are still more accurately reflective of actual behavior than a one-off survey asking people if they plan to watch TV using their computer. And that's the kind of agenda-driven nonsense that I see pushed by the tech press time after time. They've been blathering on about the imminent arrival of the digital convergence for the better part of 20 years.

I'm not the tech press.

Yet, nothing happening on the market indicates that this repeatedly deferred vision will finally happen anytime soon. (I mean, for all the hype that music downloading gets, the lowly CD continues to generate more than 70% of the actual revenue for the music industry)

That's because all these figures only record revenue. That seems to be the mantra here: if it doesn't pay, then it's not worthy of measurement. That's the kind of myopic conclusion that keeps the movie and music studios so blind to what's happening on the internet and why they can't seem to stem the tide of people leaving their cash-cow lock-ins.

Sure, there's a tremendous disparity, but even the highest paid stars and studio heads don't make up the majority of the budget or budgetary increases on a movie. The people who work behind the scenes in the industry get paid very well on an hourly basis because they're out of work whenever a movie or TV production wraps up.

Fine, but that still gives the impression of fat cat CEOs living it up while the masses starve. It's a lot like Wall Street, and frankly if there's one thing that rankles the mid-level actors and all the service people who work in this industry, it's the few CEOs who are making so much. It probably does more to hurt this industry than any other scandal.

It's not a static ideology in that I base my opinions on what the actual market data is saying about the direction of an industry.

Yes, the cold hard cash. But aren't we talking about free content (Hulu)? That's kind of like comparing apples to softballs.

An ideologically driven opinion is one that ignores the actual behavior and substitutes wishful thinking about how what other people SHOULD be doing, as opposed to what they actually do.

Well, far be it for me to point this out, but there's traditionally been a huge disparity between "actual behavior" and "revenue." Most of what people do on the internet doesn't cost a dime. Commerce over the internet hardly compares to the rest of the traffic. The idea that it should is also up for debate.

As far as the service providers go, there are literally thousands of them all over Hollywood, Vancouver, Hong Kong, NYC, and any of the other major production centers. Some of the production equipment is highly specialized, like the cameras and audio equipment. But, the people who operate it and serve the back end of film production are employed in any number of different companies. You want more competition with the equipment, but how big a market is actually there for the hardware itself? Consider that Hollywood puts out about 300-400 movies a year -- you think that there should be hundreds of camera manufacturers vying for those contracts?

Not hundreds, but a few more wouldn't hurt. What we've seen in the last 15-20 years is unprecedented consolidation, and what I consider a consistent departure from competition, innovation, and creativity. This leads to a stagnant product, such as (and I know I'm going to hear it about this one), The Dark Knight. A few years from now, TDK will be sold in the $5 bin at Best Buy, along with such other memorable blockbusters as Rocky, X-Men, Die Hard, and of course, Batman I, II, III, IV (what # are we up to now?), and all the other movies that were, in their hay-day, such "Box Office Hits."

Face it, for all it's special effects, stunts, and gratuitous (and completely unrealistic) violence, TDK is just a rehash of every other Batman movie and Hollywood action plot. That people keep lemming-it up at the box office every few years, is only a testament to our limited capacity for realizing this. We Americans seem incapable of getting off the merry-go-round of being sold the same entertainment in a new shinny package every few years. I consider this a product of our appallingly low collective IQs and schooling, rather than a testament to good movie-making. The Dark Knight is nothing more than escapist familiarity that we desperately try to cling onto for fear of realizing that the real world isn't so idealized. The day we see this (and that day may never come) is going to be revoltingly unwelcome to us all.

I mean, still photographers mostly work as freelancers, yet there's only a handful of camera manufacturers that serve the professional market. And even in the much larger consumer market, there's only a handful of manufacturers that actually make cameras.

Actually I know a bit about this history. The fact is that the camera industry was healthier, more progressive, and more innovative when there were more manufacturers out there. We may not laud film-photography as much anymore, but in those days there were more photography magazines & more art magazines, there was more respect for the art and the artists, and the equipment manufacturers did very well financially. Now, with only a few companies still making mostly digital cameras, this industry has become perhaps the most depressed in the art world. Ask any photographer and they'll concur that what we have today is far less exciting, glamorous, and profitable. It's no wonder we have no new Annie Leibovitzes or Ansel Adamses anymore.

With the effects and editing houses, they're all using relatively generic computer equipment nowadays. In the old days, you needed a dedicated SGI or Avid workstation with specialized hardware just to perform the function. Desktop PCs were not powerful enough. Now they are, and a lot of them are running open source operating systems.

As with photography, the commoditization of the technology has not lead to significant improvements in quality. Yes, we now have more wow-factor movies and perhaps greater revenues in action films, but quality is found elsewhere.

But, as I said, the production cost is not in the hardware or the software, but in the man-hours that it takes to do the actual work. You can speculate all you want about imaginary cost savings that would come about if only people would work on nonproprietary systems. But, that's a drop in the bucket compared to the thousands of man-hours needed to make a movie.

Fine, I don't disagree with that. But that still doesn't address the difference in budget between TDK and Slumdog Millionaire. Perhaps a few special effects less in TDK would have been possible? How about removing a few more CGI-generated scenes? Well, maybe not, because if you take too many wiz-bang shots out then what do you really have left? An original story? Maaaaayby not. Isn't that a revelation?

You were basically saying that they could be made on the cheap, and I simply outlined reasons why that's a short-sighted view in a market that's driven by audience expectations regarding the production value, directors, and lead actors. Cheap out on all that stuff, and the audience will stay away in droves.

Slumdog Millionaire "cheaped out" on all that stuff, and the audience didn't really "stay away in droves." If you consider that this movie provided the same 2 hours of entertainment for so much less, it makes you wonder how much of an investment TDK really is. And what if TDK would have flopped? Or, I'll be generous, what if it had just barely broken even? That would have been far less of a good investment, no? Now if Slumdog Millionaire had flopped or just broken even, the outlay of cash would have been less, right? So the risk in doing movies like that is far less, so my guess, and this is just a guess, is that movie studios who are thinking about this economy, and the insurance companies that must stand behind them, are going to recommend more movies that are in the Slumdog Millionaire budget. That's just economics.

In every recession there's a few numbskulls who continue to live it up and party like everything's plentiful. That's your typical AIG/GM CEO, TDK studio exec, and perhaps even a few people you & I know personally. The sad part is that when they finally see that they're the only ones still on the dance floor, they look that much more pathetic for it. Yes, there are industries that are still doing OK, but even they are only "OK" because of major cutbacks, layoffs, and perhaps a little more wisdom and foresight at the helm. But the more people that are laid off in this country, the more people will also stop going to the movies. I will make this prediction: the next Batman movie will cost less and generate less, yes, far less. And if I'm wrong about this, then you can come back here and chastise me about it all you want.

Less expensive movies can indeed generate good box office revenues, but they can and will also flop. Time and time again, the movies that top the box office returns are the big tent pole projects. If anything, studios that string together a series of box office flops will cut out their lower budget projects first, because large-scale blockbusters are often lower risk ventures, given their built-in audience, how they attract additional investors, overseas markets, and ancillary income from broadcast and merchandising rights. The returns from a big hit like The Dark Knight keeps those smaller scale projects in the pipeline.

You know. we've heard that every few generations: The common people need the Roman Catholic Church, the nobility, the king/emperor/tzar, the landlord, the factory owner, the Fuhrer, the Junta, Liberal Economics, GWB, the corporation, etc... It is usually followed by: they need us more than they realize, more than they need us, or some such nonsense. Sure it takes a little while for reality to set in, but it always does. I remember how T2 was such a box office hit and that everyone just needed to see it. Well I doubt that movie studio now considers this film one of their crowning achievements. It made them millions, sure, but let's be frank, for all its' super-expensive special effects, action sequences, and box-office drawing actors, it wasn't exactly in the same league as The Color Purple, The English Patient, The Shawshank Redemption, and Crash. The latter are movies that the studios hang their reputations on, even if they cost a fraction of TDK to produce. No, I would say rather that T2, Rambo, The Dark Knight, Star Wars, and yes, even Waterworld, are possible because the low-budget movies give the studios the longevity and resilience to survive. And they do so at much lower risk.

Major sporting events and concerts cost WAY more than movies. Even during good times, people go to movies more often than they do concerts or sporting events, because it's more ubiquitous and it's less expensive. And in bad times, consumers cut back on the "occasion" outings and focus more on recurring outings that are close to home. People still eat out, except that in bad times they go out for fast food rather than sit down dining. History bears this out, as movie attendance goes up during recessions. Moviegoing is something that the average person does on a regular basis. I forget the exact figure, but the average American goes to the movies more than once per month. Jazz club outings are a regular outing only for a select few hardcore fans -- it's a special occasion to just about everybody else. Otherwise, you'd see just as many jazz clubs as movie theater screens.

That still does not explain why people aren't going to $12 college baseball games, $5 high-school football games, and $1 volleyball matches. There's something else going on that has nothing to do with the price of movies and avoiding the topic doesn't make it go away. By the way, I go to concerts regularly, although I'll confess that I've been sitting higher up in the stands this year.

And like I keep telling you, the viability of those alternatives depends on CONTENT, which is something that Hulu has, and other video streaming options don't.

They do, actually. Except that the ones you're thinking of are all commercial ones. The Internet has several other free options other than Hulu that will benefit greatly if Hulu pulls it's content and keeps it only for subscribers.

Hulu's market grip would tighten even further if ABC/Disney comes on board. That would give Hulu control over the online streaming for 3 out of the 5 major broadcast networks, as well as the cable network content from NBCU, Fox, and ABC/Disney.

Let me correct that statement: It would give Hulu control over 3/5 of the major commercial providers.

And I don't think Blockbuster is going away, and if they do, there will be likely be other options to take its place.

Who? Not to rehash Niemoller's sentiment, but there's no one left.

Tech blogger Don Reisinger, whom I normally regard as an idiot (he basically claims that Blu-ray is dead because he can't tell the difference between an upconverted DVD and a Blu-ray), wrote that the new Blu-ray pricing structure on Netflix actually makes renting from Blockbuster a better deal.

Ah, so that's your bogey-man. I knew there was a reason why you were getting so upset. Look, I'm not Reisinger; 'don't even know him. But I will say that BR is just a temporary medium until downloading ramps up. No it won't go away entirely and, like bad pollution, it will probably linger around indefinitely, but it won't be the dominant medium. The price, for all it's vaulted superiority in quality (that only a few people with fancy setups will really care that much about) is still too high. This is especially true for older movies that are being re-released. Yes, there are actually a lot of people who are pissed at having had to buy the VHS, the Laserdisk, the DVD, and now the BR of the same movie. Maybe you won't hear that here, but it's a very real complaint elsewhere.

I will also add that if BR rental pricing goes up compared to DVD, then people will become more selective about the movies they rent in that format. Every single household in this country is scaling back, especially on "subscription" services, that's been said enough. My guess is that for many households, saving a few dollars every month on renting fewer or even no more BR disks, is highly likely.

I'm glad that Blockbuster is trying to hold on, and perhaps price parity for BR disks compared to DVDs, if they can provide it, is a step in the right direction. But the one thing Blockbuster still isn't doing as well as Netflix is downloads/VOD. I, along with many other people see that as the future of movie rentals. Again, probably not a popular suggestion here on this forum, but it's going to happen nonetheless. That's my opinion, and I'm going to stand by it. I've seen the superiority of BR, and I'm still not buying. I simply don't have that much disposable income right now, and I don't think I'm the only one saying this.

Anyhow, I don't really have that much time to see too many movies, I'm too busy working and trying to hold onto my job, something I should have been doing instead of posting here, but that's another matter.

[Rich-n-Texas]

AT&T Uverse is invading the city slowly but surely so some day maybe we will have modern cable.

Actually, you'll have Fiber To The Home (FTTH) which is vastly superior to cable. More bandwidth which means less compression.