Monday, April 30, 2012

Hulu Could Stop Being Free

It's time to teach the younger generation one of the great tenets of business, nothing of value is given for free.  Everything has a price and that price will continue to rise as more and more entities want their fair share of the revenue.  So for those that have enjoyed quality long form content from the cable pay model for free on Hulu, it may one day be time to announce that the "free lunch is over".

"In fact, the move by Hulu toward the new model — called authentication because viewers would have to log in with their cable or satellite TV account number — was behind the move last week by Providence Equity Partners to cash out of Hulu after five years, these sources said." As the NY Post has  reported, the cable companies are seeking to stop cord cutting, customers dropping their cable subscriptions, by turning Hulu from a digital competitor to its partner  in TV Everywhere.

But the move to authentication may take a while to coordinate.  "To be sure, Hulu’s slow move toward authentication comes amid a jumble of cable and network game plans for streaming — which remain a strategic nightmare thanks to the complicated nature of the TV Everywhere initiative, which is aimed at keeping top shelf digital video exclusive to pay-TV subscribers."

For customers tired of paying  high rates for cable subscriptions, quality programming is being created for other OTT distribution; for example, You Tube is building out live channels.  But as we have discovered, nothing stays free and as we look ahead a decade, all this free content will eventually find itself behind different types of pay models.  For now, enjoy the free lunch while it lasts.

1 comment:

  1. I used to work with Jason Kilar and Eugene Wei. I've got to think if Hulu is going ahead with this, they were dragged into it kicking and screaming.