Why Bitbop, Fox's Mobile Video Subscription Service, Is No Hulu

bitbop

A video subscription service for smartphones is to be launched at CTIA today by Fox Mobile Group, owned by that champion of the free Internet, Rupert Murdoch. (Can I just say how amazing it is to have Peyote on your cornflakes each morning?) Bitbop will allow users to view content via streaming, as well as downloadable movies and TV shows. It consists of a free app, which offers sneaky peeks, but to get the whole shaboodle, you'll pay a monthly sub of $9.99. Hmmm, shades of a paying Hulu there--which begs the question: As co-owner of the free Internet portal, why didn't News Corp decide to market Bitbop under the Hulu brand?

Perhaps the answer lies in the "co-" part of co-ownership. News Corps' partners in Hulu are NBC-Universal (soon to be owned by Comcast), the Walt Disney Company, Providence Equity Partners, (who also own stakes in Warner Music and MGM), and the founders of Hulu themselves, led by CEO Jason Kilar. Now, while you'd have thought that NBC-Uni and Disney would be absolutely queueing up to stick a socking great paywall around Hulu, which made around $120 million in revenue last year--Peter Zucker, head of NBC, has joked in the past that Kilar is more interested in the customer than in monetizing Hulu--Kilar's success is forcing the old media dogs to do it his way.

Wily coyote Murdoch, however, doesn't want to wait. Bitbop, in beta form at the moment, is a little bit Hulu, but a lotta bit News Corp. Content will be available from NBC Universal and Discovery, as well as the Fox channels, but at $120 a year may be a big ask for watching video content on midget devices--especially since rival CBS allows free content to be screened over an iPhone app.

There are three final issues that could prove detrimental to Bipbop's success or failure. One, the imminent arrival of the iPad may well lead to the virtual destruction of video content on smartphones. Two, the patchiness of some of the network providers' 3G coverage. Three: Bipbop's method of payment is via credit card rather than through customers' cell-phone billing accounts, although the company is hoping to change that soon.

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