Today on Blogcritics
Home » Film » Hulu to Start Charging Subscription Fees

Hulu to Start Charging Subscription Fees

Please Share...Tweet about this on Twitter0Share on Facebook0Share on Google+0Share on LinkedIn0Pin on Pinterest0Share on TumblrShare on StumbleUpon0Share on Reddit0Email this to someone

Yesterday Chase Carey, News Corp.'s president and COO, stated that Hulu, the online video portal owned by News Corp., The Walt Disney Company, NBC Universe, and Providence Equity Partners, will start to charge users a subscription fee at some point down the line. Such fees apparently could start as soon as 2010.

Hulu is, almost without a doubt, the best online video destination. The site streams high quality video content from ABC, FOX, abd NBC, among others, and has rapidly grown in popularity since its inception in March of 2007.

Hulu has apparently not, despite its popularity, been able to make money via the commercials which air during programming (Hulu shows are not commercial free). However, the notion that they are going to start charging is something that many will undoubtedly find deplorable. It is not easy to attempt to go from a free model to a pay one, and Hulu may find it even more difficult as much of the TV programming that they stream is available via free over-the-air broadcasts. The pro argument for the subscription model is not only that iTunes, Hulu's main competitor, has made money charging for video but that without users paying to watch, the site will never earn enough money to make it a viable entity.

As for what a subscription model might look like, that is more up in the air. Daniel Fienberg, HitFix's executive editor and TV critic, suspects that any subscription model Hulu employs will be akin to one "wherein you can watch new shows the morning after for a small subscription fee and then the shows are available for free a week later. It's hard to imagine Hulu going to any model that's more restrictive than that." Though Fienberg was merely speculating on what the model may be, he truly seems to feel that Hulu will not charge a fee for everything and that the site does need to find a way to monetize itself if it is to survive.

Should Fienberg be right about the look of the model, Hulu fans may find themselves breathing a sigh of relief. Of course, without any set date and only the possibility that a charge will be implemented in the next 12 months, it is very difficult to judge exactly what Hulu's intent may be at this point in time. It is even possible that they are merely floating the idea at this moment to simply judge the reaction from the public at large. If Hulu does opt for a pay model and that model is successful, it could greatly redefine the public's interaction with the Internet in years to come.

Powered by

About Josh Lasser

Josh has deftly segued from a life of being pre-med to film school to television production to writing about the media in general. And by 'deftly' he means with agonizing second thoughts and the formation of an ulcer.
  • http://www.studio42.com/ Chris Pickett

    Sounds like Hulu is about to go away. Oh well, I could never find what I wanted on there anyways, the search engine was horrible and I had to end up finding out the “Episode Number” and sometimes “Episode Name/Title” as well to halfway find something. It was much easier(and better quality) to simply do a search on Google for the show and find out when it was to be repeated.

    Hulu has an interesting proposal for advertisers: Instead of paying a big chunk for people to most likely simply change channels when done via broadcast television, Hulu can do a more “guaranteed” viewing option, which while may cost the advertiser LESS overall when compared to spending over the various markets, Hulu can guarantee advertisers “viewers eyeballs”.

    Traditional models say “Hey, we’ll run your add X amount of times from Period Y to Z during blocks A, B, C and D” and then it’s up to the traffic department to log and prove and state “yup, we ran it, where is our money?” There’s no guarantee anything living or recording actually saw the ad, and that’s the chance advertisers take. Hulu can track this down to the viewing level. Advertising doesn’t mean success, but it does mean that in Hulu’s case, where the audience is literally captive if they want to watch the clip, they can accurately log how many times an ad was played, and hence have a very good chance that someone actually watched it, or at the very least sat through it. Then again, maybe viewers start a clip then go grab a snack or drink while the commercial streams and buffers in, just like in the regular model.

    Getting such good statistics won’t necessarily result in more sales, but it would show a more effective marketting campaign. This makes the former shotgun blast approach of television unnecessary for Hulu. Hulu could techincally raise their advertising rates to come out ahead. Get more advertisers and the economies of scale will quickly put Hulu in the black.

    Hell, with all the advertising Disney does in print, mailers, DVD mail-outs(DVC and Park vacation planners), Movie Club, spam, online advertsing via banner ads, telelvision, and I bet they do radio too, I’m surprised Disney doens’t leverage their part ownership position to pump loads of advertising into Hulu, which Disney would have to do at THEIR expense(Disney’s, that is).

    Hulu could also charge the shows themselves(or the show owners) a modest fee for having the content available via HULU. Between that and licensing arrangements, it still doesn’t skirt the issues of royalties, just a matter of where do the royalties come from, which come from advertising dollars. Talent and creators who worked on shows don’t intend to give their work away and are most likely tied into percentages from syndication and other broadcasting methods, which would include online content delivery.(such as Hulu).
    The idea would be “well, we pay a fee to Hulu to post our content, but then views would result in some of the advertising dollars earned being used to collect royalty fees, so in the end we come out ahead anyways”. Hulu makes money to get the show on their services, Hulu still makes money off advertisers(who get guaranteed views, and the show itself makes money off royalties. Win all around.

    Personally, I’m paying a fee to DirecTV(could easily be Dish Network or a local cable company) to watch TV as it is. I am not going to give money to HULU or any other entity to have another avenue of watching TV. I also refuse to pay for content delivered in a compromised format.

    Typically almost NOTHING I watch on TV is so important that I can’t wait a week or two to see it, should I want to see it online. The few examples I have would be when someone is doing a televised promotion of an event I am working(such as a festival or concert) and I want to record that because it won’t repeat.

    As it is, I see plenty of pirated and non-licensed crap being re-broadcast via the internet.

    I say for those who want to pay, then fine, a fool and their money is soon parted, but hey, there have been many successfull online business that work just fine via that model.

  • Jill

    I dont have cable I’m using ( LoggTV.com ) for TV, Music and everything. I’m hooked on LoggTV.

  • catclaw

    who cares?

  • http://nickleshi.blogspot.com Nick

    It’s a shame. I miss the days when media could provide free content to attract mass audiences and then sell those “eyeballs” to advertisers. I thought Hulu was a sign of the future, but now it’s just going to be one of many pay-per-view type services.

  • http://waftingcurtains.wordpress.com Chelsea Doyle

    I do understand why Hulu would do this, but the only reason I visit it is because it is free. There are plenty of paid programs to watch TV online, and Hulu’s main appeal was its free status.

  • Amber

    Bummer… I dealt with Hulu because it was free… the commercials on Hulu are still obnoxious though generally shorter… When I have spare time I peruse Hulu’s selection of TV shows but there are plenty available on Netflix… I only have room in my budget for one subscription and that’ll have to stay Netflix…