Hulu could charge for content as soon as 2010
Hulu has allowed free access to TV shows and clips online since 2007.
Published Nov. 17, 2009
Hulu's slogan on its Web site reads, "Watch your favorites. Anytime. For free." The company, which has offered free 24-hour access to TV shows and clips since 2007, could need a new slogan as early as 2010, as several company executives have said paid content is a possibility for the Web site.
Hulu has not publicly stated any concrete plans to charge users for content, but News Corp. Deputy Chairman Chase Carey made his company's intentions for the site's future clear at the Broadcasting & Cable OnScreen Media Summit in late October.
According to a report on the summit's Web site he said it was time to start getting paid for broadcasting content online. He also said he would like to see Hulu charging for at least some content by next year using a subscription model that could include premium features, such as online exclusives, mobile and behind-the-scenes content. He said this would better capture the value of the Web site than the free model.
Carey spoke only on behalf of News Corp., which owns a shared stake in Hulu with several other media companies and with a number of Hulu employees.
NBC CEO Jeff Zucker, who represents one of these companies, has also been vocal about his desire to make more money off of Hulu through a pay model, but most at Hulu and its partner companies have remained quiet about any plans to charge for access to the Web site.
University of Wisconsin consumer science professor Cynthia Jasper said if Hulu moves to price content, it would go against the expected trend.
"Usually businesses go from charging to offering products for free," Jasper said. "So this would be a step in the opposite direction for Hulu."
Jasper also said if Hulu does decide to charge for content, it could risk losing many of its users to illegal, but free, download sites.
"People will find a way to get what they want for free one way or another," Jasper said. "But there will always be those who worry about the legal issues of downloading shows (without paying) and it may ease their minds to pay a little bit."
MU marketing professor Chris Groening said he foresees the possible move creating a fork in the road for consumers who do not have the money to pay for content from both the Internet and their cable or satellite providers.
"The success of this may come down to a decision of whether people are willing to drop cable altogether and go to the Internet," Groening said.
This decision would depend on the amount of content Hulu can offer, he said.
"They would need to have sports, news and everything else that cable offers to make that a realistic option," Groening said.
As of now, Hulu has 223 content providers including news sources, entertainment channels and content deals with the NBA and NHL that allow them to show highlights, behind the scenes footage and some full games.
Despite Hulu's rapidly growing list of providers, MU Reynolds Journalism Institute Fellow Clyde Bentley said content is not the only area in which Hulu might need to catch up to compete with cable.
"The quality of today's televisions creates a disconnect," he said. "A computer screen cannot compete with a 42-inch HDTV."
Bentley also said with the media industry thinking about the philosophy of providing content for free, this might only be the beginning of companies putting up a "paid wall" around their content.
"The truism is that there is no free lunch," he said. "Somewhere, someone is paying for the creation of this content so companies will continue to look for a way to support it."