Hulu Wants to be Paid Service
The tech rumor mills are abuzz today about the possibility that Hulu will start a paid service model, and specifically that that model will center around the iPad. Details are scarce, but most of the rumors indicate that either all of Hulu will be pay-only, or you will pay for some “premium content,” or that using Hulu on the iPad (or other non-Flash-supporting device) will cost money. The question is why would Hulu risk a good thing?
Right now, you can watch a limited number of shows on Hulu from a variety of networks. It’s a great site if you missed a show from last night. It’s not a good site if you want to get caught up on a show that started in the fall. The shows play in good quality and have ads play at regular commercial break times. One ad shows per break and overall, it’s not very intrusive. Overall, the service works well; Lauren and I use it at least once per week.
So what is the point of charging for the service? From a monetizing point of view, it would seem easy to make more money by playing one minute of commercials per break, rather than just 30 seconds. Or to play a couple of minutes of commercials before the show begins. Or to replace the video ads with interactive ads that require consumers to click to continue after a certain period of time has passed. (This is the style of some ads on ABC.com.) None of these solutions is consumer-friendly, but we’re already used to minutes and minutes of ads on broadcast TV. Why should the extremely convenient Hulu be different?
Hulu would be very different from broadcast TV if it started charging for service. If I start paying for the service, then I don’t want ads. And if payment is required, then people are likely to move to different sites. (After all, each network offers the same shows on their individual website.) There may be some advantage to selling content for viewing on an iPad, but the iPad is not a laptop replacement nor ultra-portable. Why wouldn’t I just use my laptop if it costs me money to play the same content on my iPad?
I think increased ads are a perfect way for Hulu to make more money, if that’s what they’re concerned about. A pay-for-extras model could be another way to generate more revenue. But if they are trying to convert the entire site to pay-only, then I think they’re due for some spectacular disappointment.
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