Video-Streaming Firms Attract Customers With Exclusive Shows
DAVID GREENE, HOST:
Now online streaming is playing a bigger and bigger role in news events. Many people listened and watched the Boston bombing coverage on their laptops. And on Friday as the manhunt came to a close, tens of thousands of people were listening to police dispatches live online. In the entertainment world, video streaming is also having a big impact.
Try this. It's estimated that Netflix alone takes up a third of U.S. bandwidth between 9:00 PM and midnight. That's a lot. Netflix, Hulu, and Amazon Prime all feature two kinds of programming - the movies and shows they all have like, for example, "Lost," and a few things they have exclusively. In the case of Netflix, that could mean making and exclusively streaming the new season of a cult favorite.
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GREENE: In today's Business Bottom-Line, NPR's Neda Ulaby says video streaming services seem to be adopting a strategy that was pioneered by pay cable.
NEDA ULABY, BYLINE: Not too long ago, Annette Isaacson and her husband finally got around to watching the BBC show "Downton Abbey" on Netflix.
ANNETTE ISAACSON: And we kind of got hooked on the show.
ULABY: The Isaacsons streamed the first season but Netflix did not have the second one.
ISAACSON: So we went out and subscribed with Hulu so we could basically watch that season.
ULABY: The Isaacsons joined Hulu Plus just to see what happened to Lady Mary and Cousin Matthew, since they could not stream it on Netflix - a service they already had.
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ULABY: As you can imagine, the fight among video streaming services for "Downton Abbey" has been intense. They don't need causal watchers. They need passionate fans, people who need to see their "Downtown Abbey" no matter what. A few months ago, Amazon Prime bought the rights to stream it exclusively. So soon that will be the only place to watch it.
But research analyst Michael Pachter, of Wedbush Securities, says maybe that's not the best way to attract new subscribers.
MICHAEL PACHTER: Exclusives are going to mean more if they are truly exclusive.
ULABY: Meaning the only place you can watch them, ever, is on Hulu, or Netflix or Amazon Prime. That means paying more to make exclusive, original content. Pachter thinks the tradeoff is worth it - look at HBO.
PACHTER: The only show I remember watching on HBO in the '90s was "The Larry Sanders Show."
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ULABY: At the time "Larry Sanders Show" was an exception, a rare original series on a channel then dominated by movies people had already seen in the theaters.
PACHTER: Now I literally watch "Boardwalk Empire, "Newsroom," you know, "Game of Thrones" or "Veep." They've just got me hooked.
ULABY: That's a strategy Netflix, Hulu and Amazon Prime are trying to emulate, says Pachter. Now, those services have two kinds of exclusives - ones they've bought the rights to, like "Downtown Abbey" and the ones they make themselves. Netflix and Hulu are not exactly competing with HBO when it comes to original programming. At least not yet, says Hulu's senior vice president of content, Andy Forsell.
ANDY FORSELL: Increasingly I think people are coming to services like Hulu to discover something new.
ULABY: Hulu is slowly growing its slate of original series, including, soon, its first animated one.
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ULABY: Whether Forsell is developing an original program, like "The Awesomes" or negotiating an exclusive for an established show, he says he's looking for exactly the same thing.
FORSELL: We want to find things familiar enough in the context of last nights TV. And it can stand up and look totally at home against the best of what was on TV last night.
ULABY: So that might be "Downtown Abbey" or just something that seems like "Downton Abbey." Research analyst Michael Pachter says the real question is: Will subscribers join these services?
PACHTER: For a week or month or a quarter and then churn back out.
ULABY: That's what happened with Annete Issacson and her husband with Hulu Plus. Once they finished watching "Downton Abbey's" second season, they canceled their subscription. When I asked if she was tempted by any of their other exclusives, she said no.
Neda Ulaby, NPR News.
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