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Hulu, Fullscreen, Maker Studios Execs Talk Subscription Streaming Challenges

With recent news that HBO and CBS are making a go of the subscription stream business, the subject was, naturally, on the minds of top execs in the space Tuesday at Variety‘s Entertainment & Technology Summit.

A panel on the state of the streaming entertainment biz raised concerns about how precarious SVOD can be, as Redbox recently discovered along with Verizon as a joint venture was shuttered earlier this month. For Erin McPherson, chief content officer at Maker Studios, it highlighted the difficulty in determining what a subscription service is going to mean for consumers.

“If you’re going the aggregation route, you have to really double down, triple down — have as much television and content as Netflix has,” McPherson said. “Or if you’re going the brand-specific, niche route, is your content strong enough? You can’t live in the middle. In the middle, you die.”

Jason Janego, co-president of the Weinstein Company’s boutique multiplatform VOD and theatrical distribution label Radius-TWC, said Tuesday that it’s not just a question of how consumer spending gets split in theaters, on cable providers or in Web entertainment services, but how those different markets relate to each other.

“I’m wondering as there are more subscription services, are they attempting to take business away from other competing subscriptions services, or are they taking business away from transactional services?” Janego said. “For us, with VOD, when I see these new services and what they’re pricing them at, does that mean people are taking money away from purchasing a film on a Friday or Saturday night? Is the pie even larger now, or is it staying the same and we’re just dividing it differently?”

One successful aggregator subscription service, Hulu, hosts more than 100,000 episodes of television content along with movies. But according to Tim Connolly, Hulu’s head of distribution, it isn’t enough just to host to content — it needs to be easily available on as many platforms as possible.

“For us, it’s really important to have placement and distribution in the places where it matters,” Connolly said. “We’re on 400 million devices. … 60%  of our usage is [on living room devices].”

For McPherson and George Strompolos (pictured above with Janego, left, and McPherson, center), CEO at Fullscreen, whose businesses are driven by advertising revenue from original content, the online explosion of video has flooded the market with content, and creates the need to find new ways to turn that content into profit.

“I don’t think the demand has quite caught up to the supply yet,” Strompolos said.

“The ecosystem online is and should be robust, so YouTube is a massive partner,” McPherson said. “But there will also be more advanced opportunities to monetize off of YouTube, and we’ll continue to march into other forms of monetization.”

The panelists agreed on the importance of actively marketing their content, not just to drive consumers to their sites, but also simply to raise general awareness that this kind of content exists.

“I’ve seen too many pitches where the entire marketing plan is, ‘And then the talent is going to promote it,’” Strompolos said. “In our world that’s one of [talent’s] greatest currency is their ability to speak directly to an audience. But I think it’s unfair to a creator to build a plan where the entire push is based on the audience that they have.”

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