Friday, December 21, 2012

Hulu - Free or Pay, Successful or a Loser?

Hulu seems to have a problem; it doesn't know what it wants to be.  With multiple owners with different ideas of Hulu's strategy, they are going nowhere fast.  Perhaps the biggest question posed by it's owners, should Hulu be a free website or subscription. According to the Wall Street Journal, Disney wants Hulu to be a free service, getting revenue through advertising; Fox/News Corp wants a pure subscription model.  

Operating as a mixture of both has perhaps limited their ability to eke out a profit. The result has been that Hulu remains dwarfed by competitors like Netflix, Amazon, and You Tube.  Less video views, less unique viewers, and less paid subscribers.  And Hulu is not only losing money, it is asking its owners to pony up additional dollars to invest in more content.  But is there enough incentive by its owners to want to work together to build out a business that eventually cannibalizes on the revenue they get from cutting their own deals with cable operators and others?  Why share your content's revenue when you can keep it all for yourself.

It may be a no win situation.  "The fact is,  (CEO Jason) Kilar has, in a couple years, built a Web brand that you have heard of. "  But with multiple owners with different, competing interests, it seems necessary for Hulu to find a single owner and a committed strategy to compete effectively.  

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