Posted April 22, 2010 8:52 am by with 5 comments

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Hulu is second only to YouTube in number of US video streams run on a monthly basis. It has generated more than $100 million in advertising revenue in its short 2-year existence. Walt Disney Co., NBC Universal and News Corp also own it. Maybe having News Corp as part of the ownership team is pushing them toward what many may feel is the unspeakable: a paid version.

The LA Times reports

Television executives don’t want to suffer the same fate as music industry or newspapers, which saw users flock to free access to songs, stories and classified ads online — and revenues plummet.

In the past, Hulu primarily offered shows that were broadcast over the air for free. But now, as the major networks are trying to extract payments from cable operators and television station groups, they can no longer justify offering the same shows online for free. Shows on Hulu also carry commercials, however there are fewer spots there than on regular television. Ultimately, Hulu is expected to adopt the same commercial loads as network television.

So, is this becoming a trend? Free and the Internet may no longer be synonymous if this kind of talk continues. Heck, there will even be the same amount of commercials as broadcast versions of shows. The times are a’changin’. The subscription service is further along than just a discussion. Insiders say that testing may begin on May 24.

Under the proposal, Hulu would continue to provide for free the five most recent episodes of shows like Fox’s “Glee,” “ABC’s “Lost” or NBC’s “Saturday Night Live.” But viewers who want to see additional episodes would pay $9.95 a month to access a more comprehensive selection, called Hulu Plus, these people said.

Is this move toward more pay options that have “premium” content just a phase or does it signal a true paradigm shift for content delivered online? I think there is a real possibility that this move toward more subscription based online offerings will gain momentum. It could have the effect of slowing down some of the tremendous growth that “all things online” has seen. It’s kind of like people and growth. At some point you stop getting taller then the tough growth that is more important, growth as a person, happens. This is where the true pain but the greatest gain is achieved.

Maybe our little Internet is all grown up now and needs to be pushed out of the nest to survive the real world where people pay for things they need and want and companies look to be profitable. It’s a big, mean world out there. Can the Internet make it?

Your take?

  • YouTube generater more than $ 300 million in advertising revenue in its short 2-year existence, as i know…

  • This is a service I might actually pay for, depending on the programs. The main competitor for Hulu right now is Netflix, who is adding back-catalogs of TV to their “Watch it now” service on a regular basis.

    Hulu has to come up with some exclusive content, that people actually want to watch, if they are going to seriously take a shot at this model.

  • Not a big deal really. I myself do not have cable TV. Living with only one other roommate, it is hard for us to justify paying over $100 a month for cable TV. Cable TV is total crap compared to what it used to be. I thought cable TV got you less advertising? Whenever I do find myself in front of a TV with cable, I find myself getting extremely frustrated with all the commercials and lack of decent programming.

    Since we dumped cable last year, we’ve been avid users and fans of Hulu. If Hulu is going to begin offering a premium service that only costs $10 a month, we’ll surely be paying. Cable is total crap and way too expensive.
    .-= Halvorsen´s last blog ..Officer James Kerstetter – A True Hero =-.

  • My concern is that if ‘free’ disappears and there is only premium content left that there will be a bigger shift to illegal downloading and everybody, networks etc, will loose out. If there was a free & premium version, how Hulu have proposed, and the premium version was worth the money I think it could take off
    .-= Luci´s last blog ..Social Media and SEO; Making the Most Of Your Facebook Page =-.

  • I think it’s reasonable to offer the last 5 episodes for free and anything before that as a premium. Still less than cable, which I recently cancelled. I recently bought an HD receiver for my HD TV so I can still pick up the big 4 channels plus PBS.

    I have a Roku box, so if Hulu were to offer their premium service through Roku (or other similar set-top box services), I might pay the monthly fee. The picture quality would be better than watching it directly from Hulu. Generally, cable companies have an awful lot to compete with here.
    .-= Kari Rippetoe´s last blog ..Whole Lotta Link Love Friday, April 23 =-.