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Hulu pushes forward with $9.95 subscription service

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)

I will stop using HULU if it starts charging.

That's why they should offer ads for people using the free service and charge ten bucks a month without commercials for the premium service. boom, they are better then cable and you'll see more people actually using their service.

If Hulu goes pay, they will go under. It is as simple as that.
People these days are looking for alternatives to cable due to high cost and crappy programming that you do get.

most people only watch 5% of what they subscribe to

ABC, CBS, NBC and FOX all free over the air
USA, TNT, TBS, and SYFY are the only Sat or cable stations I watch.

Pretty pathetic if you look at it... so what did I do,, chopped the Dish, went ROKU/Netflix and bough an over the air HD antenna,,, cost for Roku: 100 bux,,, cost for Netflix per month,,, 20 bux for what I do,,, cost of DISH for HD/DVR package at the lowest level: 120,,,, so the first non month of Dish paid for ROKU/Netflix,,, and regular tv is free

Would I like an alternative,,, Cheap alternative to get TBS, USA, SYFY,, sure,, found it and its being rolled out in massive scale,, give it time: http://sezmi.com/whats-on-sezmi/

20 bux a month,, but you have to buy the DVR that goes with it.... 299,,, but hey,,, only 20 bux a month for TV after that,,, non HD right now,, but they are working on it.

Do I use HULU,,, sure do, will I pay for a subscription on it just to get a bigger catalog,,, well,,it really would depend to be honest.... I would have to have the ability to watch any show from any season for all the stations I mentioned above and in HD,,, now if HULU pipes out commercials like regular TV,, they are DOOMED! These executives and share holders need to step back and see what is going on,,,, they need to jump on the bandwagon or they are going to go under. TV is going to Video on Demand. Sure everyone needs to make money, but doing a pay for HULU and having commercials like regular tv isn't going to cut it. You either charge the user to get everything and in HD with NO COMMERCIALS,, or just die out. Look at the Music industry,,, musicians have their own labels and bypassing the big man. Time to rethink, and adapt.

as stated in one comment: This short-sided viewpoint will only drive many people back to torrents and to pirate sites.

This still goes on in high volume. People are getting tired of paying to much for what they actually get...... now if DISH or DIRECTV would offer a $25 HD package for the stations I listed above,, I would have stayed,,, Dish had the best offer at 50 bux,, no premium,,, Directv was 80 with no premiums,,, my 5 bux worth cuz it was more than my two cents.

Hulu, either give me a subscription service or give me commercials, but come on, don't do both. Having to watch commercials on cable while paying the cable company money for the "privilege" of watching television is fleecing me twice - once for my time and once for my money. That's why I haven't had cable television for the last five years. I built my own HDTV antenna and use that to pick up broadcast channels. At least then I'm not paying any money to the cable companies.

So I have to pay $10/month AND expect "...the same commercial loads as network television."

Where do I sign up for that deal!

Now now Hulu - shame on you. You want to charge a $10 monthly fee, then this is the proper way to do it, then 'maybe' you'll retain your subscribers and perhaps even gain much more:
-do NOT add more advertising blocks...you need to realize that this simple task may be a very competitive advantage over other distributors.
-if you're trying to be a supplement to cable/dish, then you will fail. If you want to substitute for cable/dish...then you may need to revamp your content (such as to include sports), but if you're able to accomplish this along with your current business model and organization of content (with current advertising space), then you can successfully chrage the $10/month fee.
-Do this and you'll have a steep competitive advantage to content and convenience of that content, price, limited commercials, and availability (different sources and mobile). Thank you.

The whole idea of being able to watch television at will on your computer is interesting. Very much a part of the right now mentality that is so prevalent. Even now, if you go on vacation and don't want to take your childrens stuff, you can get rentals from Telluride at www.travelinglite.biz and not even have to worry about taking your own things. Another example of the right now mentality. When you get there, the items are waiting for you.

It sounds really amazing !I suppose if you like sports?I think choose right sporting clothes is very important!

It is quite unique,I really can't image how that could be!Do you like sports?I think jordan shoes are really wonderful!

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