Hulu To Offer Subscription-Based Service
$9.95 Per Month For More Comprehensive TV Offering
“Watch Your Favorites. Anytime. For Free.” This is certainly an appealing idea, but for the millions of users who regularly enjoy Hulu, a popular online site for watching television programming, the concept of watching TV shows online for free may be about to change. Until now, Hulu has streamed a digital video transfer of recent episodes of popular TV shows such ABC’s Lost, NBC’s Saturday Night Live, and Fox’s hit musical comedy Glee. At any given time, the five most recent episodes of each program are available for instant streaming on the website, for free. But as soon as May 24th, 2010, Hulu will begin testing a new subscription service, in which viewers who wish to access a more comprehensive selection than Hulu’s free offering can do so for a monthly fee of $9.95. Under the new proposal, Hulu would continue offering recent episodes of popular shows for free, but archived episodes and other premium content would be available only to paying subscribers.
Currently only Google’s YouTube streams more digital video transfers than Hulu, which generates more than $100 million in advertising revenue for owners News Corp., NBC Universal, and the Walt Disney Co. Although the 2-year-old streaming video service has turned an operating profit in its two most recent quarters, Hulu is under pressure from its owners to increase revenue. According the media giants who control Hulu, collecting a subscription fee would both bolster the site’s revenue and help condition viewers to pay for online access to video content – a practice that News Corp., NBC Universal, and Disney see as a potential game-changer for delivering content.
Although the mere mention of a subscription service may be off-putting for some potential viewers, such a move does make some sense on the part of TV execs, who are afraid that their revenues will plummet as viewers flock to free online content. The music industry and the newspaper industry have both suffered significant losses in their slowness to adapt to and reign in the online world and the effects it can have on their business models. Originally Hulu offered mostly shows that were broadcast over the air and were thus free for anyone with a TV. Now, however, major networks are attempting to extract payments from television station groups and cable and satellite operators, so free streaming is under contention.
Tags: digital video transfer, Hulu