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Hulu pushes forward with $9.95 subscription service

Hulu_Video_Player_Page
Hulu, the popular online site for watching television shows, plans to begin testing a subscription service as soon as May 24, according to people with knowledge of the plans.

Under the proposal, Hulu would continue to provide for free the five most recent episodes of shows like Fox's "Glee," "ABC's "Lost" or NBC's "Saturday Night Live." But viewers who want to see additional episodes would pay $9.95 a month to access a more comprehensive selection, called Hulu Plus, these people said.

Hulu, which ranks second only to Google's YouTube in terms of monthly video streams in the U.S., said it turned an operating profit in its two most recent quarters. The 2-year-old service, which is owned by media giants News Corp., NBC Universal and the Walt Disney Co., generated more than $100 million in revenue from advertising.

Still, that doesn't come close to matching the revenue that these companies are accustomed to raking in from their more established businesses. That's why Hulu is under pressure from its owners to collect a subscription fee to both bolster revenue and train viewers to pay for online access to professionally produced content.

Television executives don't want to suffer the same fate as music industry or newspapers, which saw users flock to free access to songs, stories and classified ads online -- and revenues plummet.

In the past, Hulu primarily offered shows that were broadcast over the air for free. But now, as the major networks are trying to extract payments from cable operators and television station groups, they can no longer justify offering the same shows online for free. Shows on Hulu also carry commercials, however there are fewer spots there than on regular television. Ultimately, Hulu is expected to adopt the same commercial loads as network television. 

Hulu did not immediately respond to requests for comment.


--Dawn C. Chmielewski and Meg James

The Hulu video player displays a scene from "Arrested Development." Credit: Twentieth Century Fox and Imagine Entertainment.

 
Comments () | Archives (134)

As someone who does not have any pay-TV service and currently uses Hulu + Netflix instant-watch to provide most of my TV-watching experience... I think I'd be happy to pay $10/month for Hulu "Plus" if it was
(1) High-def,
(2) Total catalog of all shows (at least the whole season), and
(3) native PS3 and/or Xbox interface (similar to Netflix).

Preferably, since I'm paying whether I watch or not, it would also not include commercials.

Hopefully, this may also enable them to provide more content from cable channels, like AMC (they already do a decent job with SyFy).

But, yeah, this isn't an outrage if they really provide some value to the service and give me more than what I'm supposed to be able to watch for free anyway, "live".

I will subscribe to Hulu under these conditions:
1. No commercial for subscribers.
2. Access to every episodes of previous seasons as well as current one.
3. Immediate upload of new show instead of having to wait for the next day.

Either that, or goodbye hulu!!!. Megavideo offers those (eventhough it's no legal.)

I would pay the $10 a month (since I don't have cable).

However thats with the understanding that there will be much more content available & no additional ads...

I will gladly pay it for the convenience of all content on demand. I wouldnt like it with more commercials, but if they retained the same level of targeted commercials, i would be fine.

It is a far superior offering to OTA or cable and I would rather pay 10$ than not have it at all, or go back to the others.

Just an FYI for all you "higher ups" at the media companies, you WILL kill HULU if you do this... Stop shooting yourself in the foot and accept the demands of consumers today and give them what they want, how they want, and stop overcharging for services that we would never pay for in the first place!

Oh and I'm not sure if you've ever heard of it, but we have what is called a DVR nowadays and can actually record and keep older shows without having to fork over $9.95/m to you...

Signed,
A person who is fed up with the larger media companies not accepting technology and changing with the times...

The picture just makes me want the danged Arrested Development movie to start production already. I'm sure the O.C. (oh, sorry, no one calls it that) community would agree.

What'samatter? Chicken? Cawk-a-cawk a caw! Chee chaw! Chee chaw! Let's get on this people!

I wish them the best of luck. I'm sure even making a dime from this revenue stream will be inevitably seen as a win on their part, but the "training" of consumers to pay for online content is such a short-sighted model that flies in the face of the modern consumer of media. Given that many people archive, rip, and store their content into the Tera- and Peta-bytes of space they have access to, to store this media, it makes very little sense to insist on charging monthly access to this content when ad-supported revenue has worked for them so far.

They may be able to point to the additional ad revenues generated from cable subscriptions, must carry rules and whatnot, but it's not the same model. You have people already subscribing to an online service by having internet access. What they're asking for is basically a fee on top of getting cable. Who here would willingly pay for a group of channels, ad supported channels at that, for an additional fee over what you already pay for your subscription package?! Only people who pay for HBO. Look at their subscription numbers. Is that a viable revenue stream with long term growth in the future?

I already pay for my internet access. I expect anything I consume after that point to be minimal cost or no cost for it to appeal to me unless it offers a premium over what I get for free. Archival access is not a premium, especially not in a day and age where ontop of my Netflix account, I have access to over 25,000 movies and TV shows. Or the 4 week backlog of Vidoe on Demand services available on my cable subscription. Or all the new network media available on Hulu with ads. Or streaming on the actual Network video sites. Or through less legal means if necessary.

Hulu's model will not work to the extent to make them even twice as profitable as they are under their current plan. If they wanted something solid, they should've gone to a device maker about integrated Hulu (like on my PS3 again would be nice...), or asked for a must-carry fee from Internet providers. At least that way they could make the fees a less visible process to the consumer. Or heck, even if the Hulu Plus access was only built in using Hulu Desktop.

I'll hold onto my $10 a month Hulu. Good luck with your plans.

I just deleted my bookmark for hulu.com. I'll soon forget it ever existed.

The only television I watch is online. For the longest time, Hulu was ALL I watched. Now, most networks post vids of the shows I want to watch but, I still go to Hulu...it just like the user experience and it's not too glitchy. I refused to pay for cable so why would I pay for HULU? I watch the commercials, I'd watch MORE (hey, bathroom break time!) if they put them on.

The business model they are trying to foist on users is antiquated. I had hoped, by starting Hulu, that someone, somewhere 'got it'. They understood the direction television was heading in, and moved to meet it. It was exciting!

I've already dropped any show that I can't see online. If I have to, I'll drop Hulu, too. Want to train your viewers, eh? Great! You're 'training' me to find more productive uses for my time.

Oh, and also: Good luck trying to make that stick Hulu. Especially when viewers can watch many full seasons of shows with Netflix's on-demand aspect in addition to tons of movies. Or just rent them as part of their queue.

Ha ha...hulu sucks anyway. I've moved to megavideo which is 10x better.

This is awful. I guess I'll just stick to using the internet for email, news, and the occasional TopTwitsBlog gossip round up.
I'm going to miss free TV. Does anyone know of other sites that have free TV?

So much for Hulu. Bye-bye.

Charging money for "professionally produced content" is not a strategy for making profits. It will just drive the more savvy users to less than legal means to get what they want for free. Has no one learned from the record labels? When you have a choice between free and not free you will pick free more often than not.

*** I would rather see all of the ads up front then have commercial breaks during my movie. ***

Why would they do that? Then you could walk away for a short amount of time, come back, not having seen anything.

If they interject them throughout the replay, and vary the length of the commercials, you're more apt to sitting through them because it's more effort to get up and away.

As far as this plan, I'd think they would be better off keeping it free with ads, and charging a subscription for ad-free playback.

No big deal as long as they start to allow the Hulu app on more devices similar to what Netflix has done.

I for one want to chime in with support for the subscription based model.

I'd like to think the premium subscription would also remove advertisements from the shows the premium members watch.

I also think it's nice they showed Arrested Development in the article, because I used to watch back episodes of it on hulu, and recently the removed the first two seasons.

I will absoutely sign up for this. I love Hulu and I'm happy to pay a marginal amount so that I don't have to buy Charter Cable in SLO!

All that crap about greedy companies aside, depending on how it's rolled out, I think it's a great idea.

More and more people are heading over to HTPCs, extenders and the like every day. The user experience here is the same as watching normal TV. As Hulu grows, it becomes a question of paying $X/month for cable or $10 for Hulu. Everybody calling this plan shortsighted isn't contemplating the future of professional online content. It won't be stuck on computer monitors for very long. I think the studios realize this and are acting accordingly.

If they get rid of the commercials for paying subscribers, I'd certainly pay $10/month for the convenience of watching the shows and to some extent, the movies I want whenever I want. HBO On Demand currently costs an extra $6/month. This isn't really that different of a concept.

I am an active Hulu watcher. We have no broadcast television, cable or satellite, and haven't had it in years as a personal choice. All our television viewing comes from iTunes purchases (maybe 1-2 per week), DVDs of shows and Hulu (maybe 3-4 per week) along with watching The Daily Show on their dedicated site 4 times per week.

I would happily pay $10 / month to hulu if it benefited me, which means more shows, more reliable streaming and less advertising. Hulu Ads are the only television Ads I see anymore, and I think their current model is workable. If they want $120 per year from me, then I will tolerate at most ONE 15-30 second ad per show at the beginning. But I will not pay to watch a bunch of Ads. I gave up on traditional television because of the junk programming and because of excessive advertising. I'm not going back.

"Train viewers to pay" ?!?!?!?!?!?!!?!?!?!?!?
Do truly competitive industries train their customers or is it the other way around?

I'm on Hulu about every monday and I think that this is seriously messed up. I mean, if it's $10 for anything extra that IS NOT offered now, then it's ok. But if they make you pay for anything that you're getting for free at the moment, i'll just have to torrent my ass off.

really people are going to pay for channels they can get free over the air.

If Hulu plans on charging, they'd better change their attitude toward viewing Hulu content on a "big screen." They are constantly making changes to foil software like Boxee and Playon - which can allow you to view Hulu's content on your "normal" TV. I use Playon to stream hulu from my PC to my Xbox 360 and watch stuff on my TV in the living room.

In the past Hulu has said (in essence) that they are not meant for the living room. I've seen others comment that Hulu should make an effort to get apps onto other devices and I agree with that They have an iPad app (i think), now they need to get on PS3, Xbox 360, Wii, Roku boxes, and other media center devices/ extenders.

When that happens people will go back to download TV shows from torrent sites. I think that they will loose more $$$$ by doing that. That's just my opinion.

 
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