Hulu to Add Subscription Services, Pay-per-View, Hints Murdoch
At an investor conference held earlier this week, News Corp. chairman Rupert Murdoch and NBC Universal CEO Jeff Zucker revealed that they were looking at new ways to help monetize their joint venture, the video-streaming service Hulu.com. The site, a popular web destination featuring movies and TV shows from content partners including Fox, ABC, Disney, and, of course, NBC Universal, reaches anywhere from 9 million to 42 million users per month, depending who you ask. Although the hosted content is currently ad-supported by way of commercials interspersed into the video streams, the company is interested in exploring other revenue options as well, specifically subscription services and pay-per-view programs.
According to a recent report from Multichannel News, Murdoch was quoted at the conference as saying "Are we looking at it with a view toward adding subscription services and pay per view? Yes we are." However, he was quick to add that "no decisions have been made yet."
NBC's Zucker also hinted at the company's interest in the matter. "Whether there are other ways to monetize Hulu down the road, it is something that we are open to, something we will explore," he said, but like Murdoch, reiterated "there are no plans at this time."
Subscription Services Already in Testing?
While that may be the official company line, other sites are reporting a slightly different variation on this story. The Business of Video blog, for example, says they've been in contact with sources who have confirmed that Hulu is already beta testing a subscription-based service internally and is working out the technical requirements. If that story is to be believed, the offering won't go live anytime this year as Hulu still needs to figure out the details of the business plan.
Whether or not that rumor is true, it wouldn't be surprising to hear that Hulu is working on such a project, given their obvious interest in adding more revenue-generating features to the site. Zucker himself even updated his ongoing conference comment about "analog dollars" being used to chase "digital dimes." (In 2008, it was "digital pennies.") "Certainly by next year the goal should be at least quarters," he joked.
What We Want to See: Premium Channels on Hulu
Subscription services would be a brilliant way to chase those quarters, indeed. Perhaps it could even convince cable-only paid channels like HBO and Showtime to get on board with the venture. They've already tentatively given iTunes a shot, but still seem reluctant to share current episodes in a timely fashion on that service. The reason for the networks' timidity is because their iTunes revenue simply doesn't compare to their cable TV subscription offerings or even their DVD sales. (Ironically, that's probably due to the fact that they don't offer current programs via iTunes!). Instead, they would rather entice consumers to subscribe by tempting them with their backcatalog of programming.
However, if the situation was to change and consumers could subscribe to these channels online for a comparable fee to what the companies generate through cable TV distribution, would they continue to put up such resistance? After all, money is money, who cares where it comes from?
These days, more and more consumers are pinching pennies by cancelling cable subscriptions thanks to the numerous alternatives available online. Obviously, premium channels are getting the boot, too. Imagine if they could have a chance to win back some of those penny-pinching former subscribers by way of an online subscription service. After all, what would you give for piecemeal plans that let you buy a 3-month pass to HBO instead of the all-or-nothing combo packages available via your cable TV provider?
Of course, all this is just wishful thinking on our part, but if Hulu does it right, the possibilities for their new TV distribution network are virtually endless.
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As it stands, there is no way I would be willing to pay for Hulu services. Not unless they up the quality of the video and fix their connection issues. I use Hulu's desktop client on a Mac Mini hooked up to a 37" 1080p flatscreen and the video looks like ass. On top of that, the client constantly stalls when trying to load ads, which end up not being played at all and instead I end up with a message telling me to be nice and not steal from them. Maybe if they fixed that, they wouldn't need to figure out other ways to monetize the service.
This is just a rumor right?
@ITrush: the rumor part is the middle section: "Subscription Services Already in Testing?" Everything above is confirmed.
Is there anything that doesn't read "pay-per-view" or "free trial offer" these days? Too bad.
Not mentioned in this post are all the SAG union entanglements. Reminder, hulu has dodged an epic lawsuit from actors, writers and directors only because hulu is free to use. Change it to pay and hell is gonna break loose over residuals.
I would pay for a Hulu subscription per show under three conditions. I get 720p or higher resolution, no commercials, and the content was available the day it airs.
I believe Fancast (www.fancast.com) already offers this kind of service. Specifically- if you have premium channels in your cable subscription you can watch premium content like HBO or Showtime. The feature is currently in user trials.
Why cannot they just keep it free. The advertising makes a profit so why be greedy??
Not so fast, Mr. Murdoch! The value proposition of Hulu as it stands right now is the very fact that it's free! It's presumptuous to think that anyone would pay to put up with all its current clunkiness. People know value when they see one, and that standard of "value" certainly goes up when switching from free to pay.
"Why cannot they just keep it free. The advertising makes a profit so why be greedy??"
Probably because they aren't making much money as the service stands today. Although popular, Hulu is another demonstration that the ad-supported model doesn't work for expensive-to-produce content unless you barrage the user with several ad placements. Same thing with Spotify. Hugely popular in Europe. But, if the company could sustain itself on the ad-supported model by itself, why offer subscription services at all? Answer: they can't.
Well, it was too good to last. No fee low quality picture will give way to paid, commercial free low quality paid picture. only now they will have to tell you why they have glitches that keep you from watching your paid content. of course, with a paid subscription, no more annoying questionnaires, just a 'bot to report everywhere you visit.
Gotta love our so called 'free' market.
If they offer a pay version that can be accessed from outside the US then I'm for it. I'm working in Japan and don't get to see anything except for the few weeks each year I'm home.
If anyone has a reasonable cost way to do it I would sure be interested...and so would many others.
This company is trying to monetize in the same way, but doing it as a person to person direct marketing platform. Rather than big companies getting big advertising dollars, people are rewarded for referring other people to watch. And the box that sits on the tv is as small as your hand. You can see it at www.nvaleo.com.
I could see it working if it had options.
Option 1) The free option being what it is right now, allowing the current shows/clips/old movies to be watched for free.
Option 2) While the paying customers get extra shows from HBO/SCIFI/and other cable networks, no advertising or very limited if any, better resolution, and better movies, more up to date.
Option 3) Pay per View for things like Wrestling/Boxing/and other pay per view content.
I could definitely see this working if it offered us more options instead of changing the current option to something else.
The venture that some have been calling a "Hulu for magazines" is now official (although it still has no name). This morning, publishers Conde Nast, Hearst, Meredith, News Corporation and Time Inc announced that they're going to "develop open standards for a new digital storefront and related technology that will allow consumers to enjoy their favorite media content on portable digital devices." In layman's custom written essays, that means the magazine publishers are uniting to figure out how to best take advantage of the burgeoning eReader market, which has seen a plethora of new devices emerge in the past year.
Hulu has already pretty much licked the technical issues of the subscription video service, although Hulu execs are "not sure how to roll it out product-wise" or how best to strike new business deals with the various TV and movie content owners.
As if we didn't know this would eventually happen. Nothing stays free. http://www.sellbiztoday.com