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.
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?