How much would you be willing to pay to watch your favorite TV shows online? Not for the first time, the corporate suits behind online video-streaming Web site Hulu have suggested that the service might start charging in the future instead of relying on the ad-supported model it currently uses.
Speaking at Broadcast & Cable’s OnScreen Media Summit, News Corp. Deputy Chairman Chase Carey said that the television industry needs to start getting paid for its content. “Hulu concurs with that, it needs to evolve to have a meaningful subscription model as part of its business,” said Carey at the event. There does not appear to be a firm timeline for charging, though Carey suggested it could happen by 2010, and the possibility of free content remaining was not ruled out.
News Corp. is one of the three primary owners of Hulu, the other two being NBC Universal and Disney. Carey’s remarks echo similar comments made by News Corp’s chief digital officer, Jonathan Miller, last June. Likewise, News Corp. chairman and CEO Rupert Murdoch recently said that all the company’s newspaper properties such as The New York Post and The Wall Street Journal would charge at least some extent for content beginning next year.
The other wild card in play here is Comcast, which is currently making a bid to purchase a majority interest in NBC Universal, though that deal is still in the early stages and subject to regulatory approval. Comcast is also planning to expand its own online streaming service in the near future to customers of its broadband service, which could present a conflict with Hulu.
It’s also more than possible that this repeated suggestion is News Corp’s way of dipping its toe into the water to see what kind of reaction consumers have to being asked to fork over a subscription payment for their media. Hulu has gained immense popularity since its launch with its ease of use and streamlined ad-supported model.
While Carey said the content providers need to have a larger overall strategy than simply combatting threats such as Google and online piracy, there’s also the potential that throwing up a pay-wall on previously free content could send otherwise interested consumers back into the arms of cheaper, more convenient—if illicit—methods of obtaining their media.
Given that risk, Hulu and its backers should consider keeping the ad-supported model and supplementing it with an ad-free subscription service. Of course, that alone probably wouldn’t be enough to keep users onboard, so the company would have to add additional features and functionality.
That’s where the mobile segment comes in. News Corp’s Carey also pointed to mobile as a place where content providers could generate revenue. Though there were rumors of a Hulu app bound for the iPhone earlier this year, the software never materialized. It would certainly seem like any successful mobile venture would have to in some way include the extremely popular platform. Of course, that might run into the brick wall of Apple’s own iTunes Store—and let’s not forget that as Disney’s largest individual shareholder, Steve Jobs can likely make his voice heard in Hulu’s operation if he wants to.