About a decade ago, it was extremely common for an Internet company with a largely unknown future to obtain hundreds of millions or even billions of dollars through an initial public offering. But since the tech bubble popped, dotcom IPOs haven't been relatively rare. That's why Hulu's upcoming IPO will be so interesting to watch. It may provide the kind of excitement that gripped investors back in the late 1990s, when young promising Internet companies sought funding. But a similar level of risk might also be present.

The big obstacle standing in the way of Hulu is finding a way to make the pay model work. This is a struggle well-known to journalism. But for Hulu it may be an even more difficult demon to conquer: at least newspapers and magazines have exclusive content for which someone may be willing to pay. Hulu, however, has to compete with cable, satellite, and broadband TV that offers the same shows and more.

In a world without those competitors happily pedaling digital video recorders (DVRs), Hulu might have a pretty good shot at making a lot of money. Anyone who misses a TV show or wants to watch more than one show at a time would have few other options, unless they would rather tangle with VHS tapes. But that's not the world we live in. DVR service can be as cheap as $6 more per month than digital TV service without it. So anyone with cable or a similar service will almost certainly find it cheaper to take that route, unless Hulu manages to find a way to make money by charging even less. That is, unless these customers are willing to give up their cable or similar service entirely.

But DVR doesn't help much with watching old shows. Of course, many of those are on DVD, and some are available for rental. Netflix even allows you to currently stream some for free with your subscription. Hulu's library might be more extensive, but you won't get access to the movie library you do with Netflix. Again, how does Hulu compete?

Each of these two alternatives are also pretty convenient for the average American, because they can be easily accessed through your television set. Although not every Netflix subscriber can stream through their TV, Blu-rays and gaming consoles are increasingly including a Netflix widget that allows this capability. Meanwhile, without a TV cord for your computer, you are forced to watch Hulu on it. Unless you're a college student, you would probably prefer to watch television on the comfort of your couch on a screen larger than the one your computer provides.

So where does that leave Hulu? Its pay model really only has two target audiences currently: those who don't use cable, satellite, or broadband and college students. That former group is relatively small, though Hulu certainly hopes it will grow as more people decide pricey monthly cable plans are a waste of money when a cheap plan through Hulu can still provide most or all of the shows subscribers love to watch. And even college students may not be as enamored with Hulu when forced to pay. So the pay model could falter.

More progress must be made before investing in the Hulu's future will be a slam dunk. First, it really needs to mimic Netflix's ability to provide streaming content without a computer. Using a computer and a TV cord to watch Hulu through your television leaves a lot to be desired, in terms of audio/video quality, speed, and logistics. The company also might want to consider finding a way to allow users to download TV shows for viewing without an Internet connection, so to compete with a la carte offerings from Apple iTunes and similar Internet stores that sell individual episodes.

Hulu certainly could become a highly profitable company, but it could also struggle to make its business model work. That's why its IPO is so much like those of the dotcoms past: there's a lot of uncertainty in the company's future. It could be a boon for investors like Google or a bust like eToys. At this time, Hulu's fate is pretty unclear.

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