I think the expression is three strikes and you’re out. And with three execs involved with Hulu now having hinted at paid content on its way, I think it’s safe to assume this is more than just an idea of something that could happen in the future. In fact, I’d suggest it’s now guaranteed to happen.

Free Hulu

Hulu is currently the free home of premium online video content in the United States. The fact it’s only available in the U.S. is annoying for those of us outside the country but there is at least hope of an international roll-out to come.

The problem is that it doesn’t look as though Hulu will be completely free for much longer. In fact, if the people in charge have their way, which they undoubtedly will seeing as they are indeed in charge, Hulu could be charging by 2010, which is just over two months away.

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Hulu has got where it is today – a very popular and widely known online video service – by being free and full of great content. The question is, would the majority of people give up the free aspect in favor of more great content? Because that’s the reality Hulu users are facing in the future.

Hulu As It Is

Hulu has been built on the tenet of providing free premium content over the Internet using an advertising based model to first cover costs and secondly generate revenue. And it’s been a pretty successful strategy, allowing Hulu to build a sizable audience.

However, the company is still expected to make a loss of around $33 million this year, despite revenue of $164 million. So naturally the thoughts of those at or near the top of the companies who own and control Hulu have turned to whether a different approach would prove to be better.

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Hulu is a brilliant service which has truly brought American television to the online masses. Part of the appeal of Hulu is the fact it’s free, with revenue coming from a purely advertising-based model. But certain parties want to change all that. Could Hulu survive the transition to a subscription-based model?

Hulu – Hot and Getting Hotter

Being British, I’m jealous of Americans for one reason and one reason alone – Hulu. Yes, we get to watch BBC programming on the iPlayer, and there are a number of other online TV catch-up services either already present or about to launch in the U.K. But Hulu offers American television at its best.

Hulu is massively popular in the States, having around 40 million viewers at the last count, who between them watched nigh on 500 million video streams. Which is surely cause for celebration amongst the partners behind the project.

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The Xbox 360 is winning the fight for consoles to become important cogs in the online video sector. And a set of new Netflix features rolled out on the Xbox 360 have coincided with a promise that Netflix will not be coming to PS3 or Wii any time soon.

Netflix On Xbox 360

Xbox 360 owners gained access to Netflix’s ‘Watch Instantly’ video-on-demand streaming service last November with the roll-out of the long-awaited New Xbox Experience. This gave Xbox Live subscribers access to the 12,000-plus movies and television episodes Netflix gives away to its subscribers.

This was just the latest step in the evolution of video games consoles from being meant just for games to becoming true multimedia devices designed as living room entertainment hubs.

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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…

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.

Revenue Options

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?

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Disney content is now on Hulu, and in exchange The Walt Disney Company has taken an equal-third share of the service. Who wins and who loses in this deal? Is Hulu’s future all rosy or are there dark clouds on the horizon?

Disney Deals

At the end of March it was announced that short-form clips of Disney shows would be coming to YouTube. At the same time, The Walt Disney Company was said to be having discussions with Hulu about possibly coming on board.

A month later, almost to the day, and that deal has now been officially announced. Disney is now an equal partner in Hulu alongside the founding companies of NBC Universal and News Corp. Hulu will get content from ABC, ABC Daytime, SOAPnet, and The Disney Channel. While Disney will get a 27 percent share in the company.

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Video games consoles are rapidly becoming an important part of the distribution of online video. Already available on Microsoft’s Xbox 360, it looks as though Netflix video streaming could soon be headed for the Sony PS3 and Nintendo Wii as well. Fingers crossed.

Video Games Consoles

The current-gen of games consoles seem made for the distribution and delivery of online video. All of the three home consoles, the PS3, the Xbox 360, and the Wii, can all be hooked up to the Internet, and most are in order to allow gamers to play online against other people.

But being hooked up to the Net also means streaming video and video downloads become a part of the consoles’ repertoire. And with consoles installed and hooked up to the Net in millions of homes around the world, it’s a market just waiting to be tapped by companies which realize the potential that exists.

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