Tuesday, July 6, 2010

I like to watch TV, while I watch TV???

“I think the hope is that a $10 subscription [for Hulu] is a complement to a $50-plus subscription from a cable or satellite company" (NY TIMES)

Hulu a website that let's you watch TV online has just announced they will be offering a new service with access to more shows for 9.99. So how can TV shows complement other TV shows. Usually in economics goods that are complement you enjoy together (eg coffee and cream, cold beer and sandwiches, neck ties and dress shirts). But I would think hulu and cable are substitutes. That is goods you can enjoy instead of the other one (eg coffee or tea, beer or wine, shirts or sweaters)

I think the idea is that Hulu might get you interested in a show so after you watch one season on hulu, you'll want to watch the next on cable.

I'm not really beleiving it. I've used Hulu's free service and Netflix as a substitute for cable. I think the owners of Hulu (NBC/Fox) which also have a major interest in cable and satelitte think Hulu is not too close of a substitute so it lowers their cable earnings less than their Hulu profits.

Finally, let me know by clicking on this link if my blog is a substitute or a complement to vuvuzelas.

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Nate Roth said...

Cold beer and sandwiches?

rjgitter said...

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