Hulu: The Web's First Cable Operator?

Under pressure from its owners, the online video service is rethinking its free business model

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Hulu, the free, ad-supported online television archive, is considering transforming itself into the web equivalent of a cable operator, the Wall Street Journal reports. In its new incarnation, Hulu would provide paid subscribers with live TV and video-on-demand bundles over the Internet.

The idea comes as Hulu's owners--NBC Universal, News Corp., and Walt Disney--grow increasingly concerned that offering their biggest shows for free on the site undermines other business lines, like DVDs or original TV broadcasts and reruns. Hulu's owners are also selling their programs to subscription-only Hulu competitors like Netflix and Apple, as the industry as a whole adjusts to people turning to the web for TV and movies rather than cable or satellite providers. Hulu recently launched its own subscription service, Hulu Plus, which gives users access to more programming on Internet-connected TVs and mobile devices.

What do people think of Hulu's proposed overhaul of its business model?

  • This Could Replace TV, argues Electronista: "The approach if true would at once protect traditional TV by steering users towards paid material but could also serve as a true replacement, offering real live content instead of limiting users to day-after shows as on most Internet sources."
  • Say Goodbye to Hulu's Value, states Karl Bode at DSL Reports: "The benefit of Hulu was its a la carte nature, and the fact that the service was ad supported but free. With NBC and company not wanting the service to be more appealing than traditional cable, they're going to continue to do everything in their power to dumb the service down until it's little more than a big, blaring advertisement for traditional television."
  • Sounds Like Hulu's Swan Song, claims Gizmodo's Brian Barrett: "Is becoming a live television portal online really the answer? Of course not. Whatever allure watching television live had--with the exception of sports and certain 'event programs'--died out with the advent of DVR. It's also hard to see how video on demand would be a compelling offering to a generation weaned on iTunes, Amazon On Demand, and their cable providers."
  • Hulu Needs Its Owners' Shows, asserts PaidContent's Andrew Wallenstein. It's concerning that Hulu's owners are licensing their programs to rivals like Netflix and contemplating yanking some of their free content from Hulu entirely, he explains. "A Hulu without exclusive content has no competitive edge," Wallenstain says. "We've already seen how impactful it was when Viacom yanked Comedy Central hits The Daily Show and The Colbert Report; imagine how embarrassing it will be when ABC or Fox inevitably takes back a primetime hit."
This article is from the archive of our partner The Wire.