If you enjoy watching TV shows for free on Hulu, then today's news won't make you very happy. News Corp., one of the co-owners of the site, has confirmed the rumor that it intends to start charging fees at some point. New Corp. Chairman Rupert Murdoch is a big fan of pay-for-content experiments, so I'd imagine he's pushing for this model and eager to see it in action. At this point details are still sketchy, because they probably haven't been finalized yet. I'm not convinced that charging for Hulu is the best idea, but if it's determined to go that route, how should they do it?
Subscriptions
I think the worst idea is to force anyone who wants to use Hulu to pay a periodic subscription fee. I don't think this speaks to the function of Hulu. Most U.S. consumers who watch shows online also own televisions. So they can watch the same content that Hulu provides at no additional cost on their TVs. Hulu is a supplemental entertainment source for most users, not a primary one. Consequently, I'm not sure that many people would be willing to pay a subscription fee to watch TV shows they already have access to. For those who have digital video recorders (DVR), the likelihood of paying a subscription fee for Hulu seems even less likely.
Bundles
The other problem with a subscription fee is the mere logistics. Do you have a subscription for the entire website? For certain channels' content? For each TV series? Derek touched on this back in June when he wrote about the rumor that Hulu would start charging for access. He suggested that they sell bundles, where you could pay for some content instead of all content, presumably at a lesser price. I think that's probably on the right track. This way, consumers will only pay for what they want and probably feel like they're getting a better value.
Pay-Per-View
You could even take bundles a step further: what if you had a pay-pre-view system for specific TV show episodes? It could be kind of like iTunes, where you pay $1 for each episode. The site could then keep users' purchase histories, and they could watch their purchases on the site as many times as they like for no additional charge. This would be my favorite approach. I'm the type who only uses Hulu when I manage to miss a TV show that I meant to DVR. I'd be very willing to pay $1 to purchase a missed episode. I wouldn't consider a subscription.
So what's the best strategy -- subscription, bundles or pay-per-view? I think the right move would be to develop an infrastructure that allows for all three, depending on users' preferences. There are some people out there with no TV who might love a full subscription, others without DVR who might like bundles, and another group who just wants one-off viewing. There's no reason all of these options can't be offered simultaneously. Doing so would maximize their capture of consumer demand.
But which style do you prefer? Vote in the poll at the end of this post.
Open Questions
One looming question I see, however, is advertising. Do you still have it if you charge for viewing? I am sure that the site's owners would love this, because it would increase their profits. But this might anger users. Some people believe that if they are paying for online content, then it should be commercial-free. I think there's a certain psychology there that dictates this feeling. Sure, we pay for cable and still have to sit through commercials, but you can largely get rid of those too now with DVR -- particularly for content that isn't live, like that found on Hulu. Another possibility could be "premium" commercial-free options at a higher price. I'll be curious to how the site handles ads once the fees begin.
Finally, I wonder how other channels will respond. Not all networks have their content on Hulu. Some have their shows on their own site. Others don't have them online at all. Will the opportunity to gobble up additional fee-based revenue bring them to Hulu? I think in some cases it will and could very well expand the site's offerings. The other possibility is that some networks continue to choose to offer their content for free online. That could drive frugal internet viewers to those sites instead.
What a ridiculous waste of a good idea. Hulu has helped a great deal in transforming the way we think about watching TV, while keeping the advertising business as an active participant. In fact, I find myself actually grateful for the 30 second commercials. I can get a break when I want by pressing pause, but I can't skip the commercials. By making the commercials only 30 seconds they pretty much guarantee a captive audience, adding to the value of the advertising. I think this model has a huge potential! But if Hulu becomes another subscription or pay-per-view service, count me out!! In this age of free information interchange, where open-source and free is becoming more of the rule than the exception, I predict a major backlash if Hulu goes in this direction. Already, people are choosing to watch things outside of the major networks. And there are other competitors who will continue to offer these services for free. Hulu has established itself as an elegant interface and a trend setter. Why would they voluntarily give up this position? Hulu, you had me at "hello"; but you lost me at "subscribe".
I agree completely! Hulu needs to provide some research on ad viewership. Because the commercial breaks are short and you can't FF through them, I's suspect they get better recall, etc than regular broadcast, DVR or OnDemand.
Seems like Hulu would leverage this advertising opportunity rather than drive away viewers by charging them.
I've said it before, I'll say it again. If Hulu starts charging, everything which used to go up on Hulu will go on Youtube or myriad other sites. Sure, the usual cat and mouse game of the networks telling Youtube (and others) to pull it will entail, but we'll get our entertainment.
However, instead of a revenue stream from Hulu (which the previous commenter deftly pointed out has a good captive audience and quite a bit of room to grow), they'll spend money on injunctions to force their program off the air.
Good work, Murdoch. I just hope that NBC has the sense not to follow suit. Which reminds me, I have to fire up Hulu to watch The Office and 30 Rock.
Yet again, the greed of the rich and short-sighted ends up curtailing the aspirations of a new and eager generation of Americans. When will these foolish baby boomers get out of the way? Charge for whatever you want, Rupert. After you kill Hulu with this nonesense, another service will just pop back up. When you're finally gone, maybe we'll be able to get this technology train moving again.
One more thing, try learning a lesson from the American telecommunications industry. They delayed cellular adoption by dragging their feet in the landline cash cow. Now Japan, South Korea and China run cell networks that put our sorry "3G" boasting to shame. So called third world nations have truly impressive adoption rates, while we're still mired downloading neato ringtones. How impressive. Imagine all the money that can be made from fearless innovation!
Move aside you frightened geezers. You are no longer necessary.
Since Hulu makes me watch commercials, I never thought of the service as free. Sponsors are paying them for access to my eyeballs.
If Murdoch doesn't just incorporate a whole-site subscription for content that is not on the site now, (for instance, most television shows only post the last five episodes to air, but people still want to watch earlier seasons) then he is surrounding himself with people ignorant of the way the world works now. Hulu is a popular service because it's free and the legitimacy of genuine television makes advertising revenue more reliable.
A freemium service where most people watch for free but some pay for bonus features is the only reasonable way to addend the Hulu service.
Your poll doesn't have an option for "I would stop using Hulu," which would be my choice.
I agree with 80'sjunkie, Techincally Hulu is not free, albeit the commercials are short, but they are commercials. I myself gave up on cable and dish television simply because I can watch what I want when I want without having to pay exprbitant fees. I pay for Netflix, which comes to a grand total of $9.00/month. If I had to pay $10 or so a month for Hulu, I wouldn't argue, but the commercials would have to go bye bye. I have my laptop connected to the tv with an HDMI cable and have surround sound stereo hooked up to that. My cable is $44/month, plus the $9/month from Netflix, I use Vonage for telephone. I live about a block from the hub so my internet is actually as fast as my upstairs neighbors' cable. So, my total bill now is $78 which is almost a hundred less per month for the "bundled" deal everyone is offering. Whatever Hulu does I'm sure they will have a good following. I've been with them since they were offered in BETA.
I've used Hulu off and on, but I wouldn't pay for it. Not when so many old episodes are missing. These days, I've been using streaming on Netflix more than Hulu.
If Hulu wants my business, they need to become a go-to site for old TV programs. The selection should be endless, like Netflix is for movies.
You know what's funny? Cable was originally introduced to have TV without commercials. Now you pay a company to watch mostly commercials. This HULU this seems like that same thing. They are just going to end up charging and then still playing the commercials. The reason this keeps happening is simple, we keep paying. How much money would you have if you didn't pay for your TV? Probably around $840-$1200 each year. I'll bet you could buy the box DVD set of each and every TV show that aired that year. I don't know, do what you want.
Technically, cable was first introduced in areas that couldn't get regular TV reception through antennas, either because they were located too far from the transmitters, or had issues with mountains or other interference. The cable company simply transmitted the traditional stations.
People paid because they otherwise couldn't get a signal, or got a very poor signal. No one else was interested because they could get the same local stations over the air.
Then HBO and competitors chose cable ("pay TV") as a way to transmit movies and other events, for a fee. This led to cable being installed more broadly across the country. For many people (presumably like jbarnett) was when they were first introduced to cable.
This broader coverage and audience then led to the development and introduction of commercial-based cable networks, like ESPN. The "superstations" - WGN and WTBS - also jumped onto cable as a way to grow their audience as well.
I'm one of those without television service of any type. I don't have cable or dish because they are too expensive, and I can't even get OTA in the building I live in. But I do like TV a fair amount. I used to make do with Netflix DVDs, Amazon downloads, and the occasional torrent, but over the last 18 months or so I've come to use both Netflix streaming and Hulu as my primary source of TV watching, with the occasional Amazon download thrown in for shows I really like and can't get via on of the other sources.
I'd be willing to pay a small subscription fee for Hulu service assuming a couple of things. 1) They would have to be more open to letting content get streamed to a TV. I currently use software to stream to the Xbox which works well, but it could work better if they supported it. 2) They would have to figure out a way to improve quality and performance. I currently get a fairly low quality picture and semi-frequent buffering, which I'm willing to deal with since it is a "free" service, but if I paid I would demand better.
On the other hand I see a lot of people who really won't pay any price, even though most of them have or had in the past paid way more for just plain cable TV service. I'm not sure where that puts the television industry, their product costs a lot of money to make, and I for one like at least some of my television to consist of shows with good writing and high production values, which means I need for both me and other people to pay for it somehow.
I don't have I'm using ( LoggTV.com ) for TV, Music and everything. I'm hooked on LoggTV.
If they add value on top of the current offering then they can charge for that new value. If instead they take the currect service and drop it behind a paywall they will be making a big mistake.
They could keep a free limited service as is, with the current delays on shows and limited back library. Then for Premium they can add earlier access to shows (immediately after air), and longer access to the back library (as long as the show is airing any previous episode of the season). If they can add a marginal cost route to premium channels e.g. $10-15 additional for hulu with Showtime and HBO, it would probably get me. The cheapest route to HBO or Showtime would be a big win. If netflix did the cheap route to hbo I'd up the amount I pay them instead, as their streaming is superior.
For premium they need to fix Hulu to correctly work with remotes, and drop their attempts to restrict getting it on TVs ala Boxee. Finally they simply must drop all Ads in the premium subscription. No one is going to like 'paying' twice. Though they might get away with 'previews' before the show.
Either way they must be confident that any competitor is way behind, otherwise they are opening themselves up to have their lunch taken from them. Welcome to Myspace redux Mr. Murdoch.
I certainly understand Hulu's need to monetize their site, but they are already embedding commercials into the content. This, and on-page advertisements should be enough. If they decide to charge a fee, I will certainly quit using the site.
I voted for pay-per-view, but honestly I would probably almost never pay-per-view -- I'd have to be really over a barrelhead with no free alternative before I'd pay a dime, particularly if I still had to sit through ads. Virtually never gonna happen.
I pay over $60 a month for cable TV and only view Hulu, etc. if I miss a fave show. Am in the process of turning a slightly older PC into a DVR for this very purpose. I don't mind sitting through the commercials on Hulu, I understand they have to pay the bills, but WILL NEVER pay for this type of 'service'!
BTW: This ludicrous 'poll' above is obviously installed/funded by Hulu et al, because it does not have a button for those of us (and we are legion!) who would have clicked the 'Will stop using and will not subscribe' button! I refuse to take your non-'survey'.