Hulu is currently in a fantastic position, gaining viewers every month, and bringing in enough money to just about get by. But is that ever going to be enough? Or are the paymasters and networks providing the content going to want more?
Hulu is, by any measure you care to you wish to look at, a success. Its branding is strong, the content is great, viewer number are steadily growing, and it’s even making money. Not as much as it would like, obviously, but then which of the numerous online video companies is achieving the turnover it wants? Even YouTube is struggling despite getting enormous traffic and being known the world over.
All online video services, barring maybe the BBC iPlayer which is paid for by British license fee payers (sort-of), rely on advertising to pay their bills. Hulu is no exception. Unfortunately, advertising rates, especially online, has dropped considerably over the past year or so. And that has hit online video companies, as well as blogs, Web versions of newspapers and other sites.
There is, obviously, an alternative method of raising money, and it’s one that News Corp has used often, most notably with The Wall Street Journal. News Corp is an equal partner in Hulu, along with NBC Universal and recent buy-in Disney. So, could Hulu soon charge for content, or shift over from the free, advertising-based model to a subscription-based model?
The latest comScore metrics for April are out, and the figures show a small (4.4 percent) growth in overall streams, and a drop in unique visitors from 41.5 million in March to 40.1 million in April. It’s not a disastrous result for Hulu, which is still sitting pretty in third place behind Google (YouTube) and Fox Interactive (MySpace). But it does show the incredible growth of recent months may be at end, at least that is if you believe the numbers.
At around the same time as this data was released, there was a little spanner thrown in the works for all those people who currently enjoy watching content on Hulu for free, many of whom have actually dropped their cable subscription thanks to the explosion of free online television options.
Subscription Model On Way?
According to Daily Finance, Jonathan Miller, News Corp’s man in charge of digital services, suggested that some Hulu content could potentially be made available only to paying subscribers. Miller, who is set to attend his first board meeting at Hulu on Monday, said:
“In my opinion the answer could be yes, I don’t see why over time that shouldn’t happen. I don’t think it’s on the agenda for Monday [but] it seems to me that over time that could be a logical thing.”
So it is merely speculation on Miller’s part but its speculation coming from a man who is due to have at least a hand in shaping Hulu’s future. I can well see this happening as the costs go up and the viewing figures start to plateau as they already seem to be doing.
Would enough people pay for Hulu to make it worthwhile setting up a subscription-based revenue model? What sort of content would need to be behind the pay wall to warrant the fees? And would viewer numbers drop off completely if too much content disappeared behind that pay wall?
These questions are all ones likely to be answered in the coming months as Hulu works out where it’s going to go next. But be prepared to accept the free ride may be over soon.
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