Hulu users may soon need to purchase a subscription, with the site’s management in talks to transform the once free service into the first Internet cable network, according to a report in The Wall Street Journal.
A recent report suggests that disagreements among Hulu’s three owners, The Walt Disney Co., NBC Universal and News Corp., over the amount of free content on Hulu, could result in the company switching to a subscription-based business model. The disagreements stem from concerns by the three companies that Hulu could be hurting their profitability. While the details about pricing are still unclear, reported talks within Hulu’s management suggest that the changes could go far beyond merely charging for access.
These more drastic modifications would make Hulu similar to a traditional cable network, in that the service would offer subscriptions to different bundles of channels at a range of prices. Users would be able to access recorded shows on demand, as well as watch the channels they subscribe to live on their computer. Both recorded and live shows would still be shown with ads. But in order to be successful, the public would have to be willing to pay for content that had previously been available at no charge.
Sophomore education major Molly Mulhern said she would turn to sites like YouTube if Hulu was no longer free. ” I use Hulu, but it isn’t worth paying for,” she said.
Sophmore biology major Whitney Bowen took it one step further, saying she would give up TV altogether rather than her hard-earned money if the site began to charge. “It’s not that big a deal, I would rather go without TV than pay,” she said.
Both Mulhern and Bowen initially showed interest in the idea of paying for Hulu as an Internet cable network, but their intrigued looks immediately turned to dismissive shakes of the head when informed that they would have to find their own way to get the content onto an actual television set.
“It seems like a pain to hook up your computer to the TV,” said Bowen.
Indeed, one of the challenges Hulu could face would be whether or not the public is willing to give up traditional television for the Internet. Hulu has tried to make it easier for users to bridge the gap between their computer and TV set, with software available for the Playstation 3 that allows streaming of Hulu’s content onto a television. However, this is only open to people with a paid subscription to Hulu Plus. Hulu also indicates on their website that they plan to add support for more devices in the future, such as the Xbox 360 and TiVo Premiere DVRs.
Another issue facing Hulu if it decides to charge for access is the exclusivity of its content.
Junior computer science major Chris Cioffi says that he would only pay for Hulu if they had shows that weren’t available elsewhere.
“I would just look on sites like ABC.com and NBC.com if [Hulu] started charging . . . plus I already have Netflix so I couldn’t see also paying for Hulu,” Cioffi said. So Hulu’s future success might depend on their ability to secure exclusive rights to enough content.
Cioffi’s comments are also indicative of another possible issue concerning Hulu’s future viability; the popularity of its competitors. The same report from the Wall Street Journal that details the possible changes to Hulu also says that Hulu owners The Walt Disney Co. and News Corp., who own ABC and Fox Broadcasting respectively, are trying to sell more of their content to competing companies such as Netflix Inc., Microsoft Corp. and Apple Inc.
With less exclusive content, Hulu won’t just have to convince people to start paying, but also woo them away from other more well-known subscription-based services.
If Hulu does begin to charge for access, it wouldn’t be the first time the company added subscriptions to their business model.
In Nov. 2010, Hulu officially launched its paid service, Hulu Plus. For $7.99 a month, users can access the entire current season of available TV shows, rather than only the most recent five episodes as with the free service, and can watch Hulu on devices other than their computer, such as the iPad and iPhone.
However, both the iPhone and iPad app have a two out of five star rating in the app store, with many of the negative comments focusing on the fact that the service costs money but still has ads during programs (something the report suggests Hulu does not intend to change if they switch to a paid service).
It looks as if whatever Hulu decides to do, it will be a balancing act between satisfying a public that has come to have certain expectations of Internet TV, and maintaining profitability for companies that provide the site its content.