To watch videos on this iPhone, please subscribe to Hulu Plus.They are segmenting their market by device. But, they've got their market segmentation backwards.
What drives companies to try market segmentation is the idea that you can maximize profit by charging more to customers who are willing to pay more. Joel Spolsky explained it well in his article "Camels and Rubber Duckies".
Hulu has it backwards because they are trying to maximize profit on small, wireless handheld devices, rather than on big-screen home theaters. Phones are becoming the common way to view online content. Phones are the horizontal. Big screens are the vertical.
They also have it backwards because people will pay more when they can combine viewing with eating, drinking and socializing. (Why do people still go to the movies if everyone complains about how expensive they are?)
Ever try to eat dinner while watching a video on your iPhone? Ever try to share that show with the person sitting next to you? Suddenly the 1950's experience of having dinner and enjoying a show with your family becomes a feature worth paying for (again). I suspect the big networks (the ones behind Hulu) take this TV experience for granted.
Eventually Hulu will figure this out and try to flip it. But, they won't be able to without losing customers. People are sensitive to artificial segmentation. People will realize that this segmentation is contrived and will entertain getting their entertainment elsewhere.
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