More signs Hulu subscription service is coming

On Thursday came more signals from News Corp. that Hulu will charge for at least some of its films and TV shows.

Chase Carey, News Corp.'s deputy chairman, suggested in comments he made at the OnScreen Media Summit that it's just a matter of time before Hulu, the video service founded by News Corp. and NBC Universal, launches a subscription service.

"I think a free model is a very difficult way to capture the value of our content," Carey said, according to a report Broadcasting & Cable, which co-hosted the conference. "I think what we need to do is deliver that content to consumers in a way where they will appreciate the value...Hulu concurs with (the notion) that it needs to evolve to have a meaningful subscription model as part of its business."

Asked when Hulu would roll out its pay model, Carey, who has been to only one News Corp. board meeting since his recent arrival at the company, was less sure. According to Broadcasting & Cable, Carey thought the move would likely be made in 2010. He acknowledged however, that no timeline had been set.

Carey's comments follow similar statements made by other News Corp. decision makers, including Rupert Murdoch, the company's chairman. Murdoch has talked about charging for content at the online units of many of his media properties, including The Wall Street Journal.

If Hulu charges, it's a big deal. The video site, which offers full-length TV shows from NBC Universal, Twentieth Century Fox Film, and other top entertainment companies, is a pioneer. It's the first online ad-supported video service to successfully offer long-form content. If it retreats from the ad-supported model, then what consumers get is the cable business model transplanted on the Web.

And charging for content online may not solve Hulu's revenue problems. Subscription video-on-demand services have to compete with a score of sites that offer pirated content free of charge.

The reason that Hulu is considering a pay wall is presumably because the site isn't generating the kind of money the studios have grown accustomed to. Advertising experts have said that it's not possible to insert enough ads without ruining the viewing experience on one end and on the other, it's not possible right now to obtain the kind of ad rate that will generate big money.

It's interesting to note that while News Corp. appears to be dissatisfied with the ad-supported model, Sony Pictures Entertainment appears to be doubling down on ad-supported Crackle.

There isn't another major studio distributing as many full-length feature films online on an ad-supported basis than Sony Pictures. In February, Crackle began offering catalog film titles from its vast library on Crackle. Recently, "Taxidriver" made its ad-supported Internet debut.

Since Sony Pictures relaunched Crackle--formerly a user-generated video service--in February, the site's premium monthly streams have grown to nearly 10 million, 27 percent of which were in the site's core demographic (men, ages 18 to 34), according to statistics provided by ComScore. Time spent on Crackle has increased sevenfold in that period, to 13.4 minutes per unique session. In the core demographic, that number rises to 16.7 minutes.

Here's another benefit that Crackle offers Sony: the site will post premium films when they aren't under contract to a cable or broadcast TV station. Before Crackle came along, movies like "Taxidriver" would gather dust during the periods when they weren't being aired.

We don't know what kind of money is being made by Hulu or Crackle, but regardless of whether Hulu charges for its content, there is still hope for ad-supported movies and TV shows on the Internet.

[katiepea]

this WILL effectively be the end of hulu, it will however bring a myriad of new options that are probably just sitting and waiting for hulu to fail. cmon hulu! hurry up and fail.

[karpenterskids]

I, for one, will stop using Hulu, if they start charging for their content.<br />(And I currently use them to watch at least two shows per day)

[abcd9009]

Leave it up to Murdoch and everything will fall. Biggest example - MySpace... What it was before Murdoch bought it and what is it now - NOTHING.<br /><br />I think Murdoch should stick with Fox and the conservatives and leave the content management to others.

[swissarmybud]

NO! Leave Murdoch alone!!! MySpace iz goong to pwn sow many moneys now thei hav a nu ida! No, but really... I just read that MySpace's "new focus" will be on music and videogames. I don't know exactly what that means, but I abandoned my MS account (well, in terms of use... it still exists, but only the same way my hotmail account still exists now that I've been using GMail for 5? years, more of a legacy issue and not wanting to leave behind a potential form of contact) years ago, and transitioned (screaming and fighting the whole way, until I got there) to FaceBook. Now I don't know about the other CNET readers, but I don't think I'm going to dust off my MySpace account because they sell music and flash-based video games. Isn't that what my cell phone is for???<br /><br />No thanks. I'll keep my FaceBook, cell phone, spare time, and dignity.

[TVGremlin]

I am supposed to pay my internet provider a monthly fee then pay Rupert Murdoch one of the worlds most wealthy men to watch re-runs? Sounds like double billing to me. I think the effect this will have is an increase in TV show Seasonal DVD's and people's already shaken trust in "free" inter-net content. Why pay a monthly fee when you can by it and watch it at your own pace and time? Hulu will go on the inter-net junk pile just like network Brodcast TV. It's funny at a time when networks and production companies are starting to put shows on their websites to earn more advertisement revenue, Hulu is going to lose viewership to production companies and TV networks by making people pay a subcription fee. And I don't think I've ever been on a fee based site that dosen't still have advertisments on it. Bottmline is double billing drives people away.

[TujuMaster]

If Hulu starts charging, I'll just stop watching. I don't see any reason why I should pay for both Hulu and Verizon Fios. These media companies rob us blind anyway.

[HlLLARY CLITON]

well good luck with that model HuLu, R.I.P.

[karpenterskids]

It wouldn't be an evolution.<br />It would simply be a death wish.<br /><br /><br />R.I.P. indeed.<br />The only reason Hulu's made it to where it is right now is because it's both convenient and free.<br />Start charging, and you've lost both of those appeals.

[ThreeMilesNorth]

Hulu WAS.

[mtgolf7]

Yeah its sad to see Hulu go, would just be putting a couple more nails in the coffin of the major broadcasters

[gwailo247]

I really would not mind if they subjected me to as much advertising as on regular TV when watching new broadcast shows. After all that is what I "pay" to watch The Office tonight, so I don't mind "paying" that online. But if they actually try to charge me money I will move on to other free sources.

[karpenterskids]

Yeah. It would be nice to (if they truly HAVE to make a change) give users the option of either paying, or simply getting thrown 2, 3, or 4 times as many ads as normal, to compete with TV.<br /><br /><br />That way, at least, they'd only alienate 50% of their user base, instead of 75%.

[talking poo]

@karpen - I agree, give us choice. Those who want a ad-less viewing experience can pay $1.99 or whatever per episode. I really don't mind sitting more commercials if it means keeping it free.

[Brazicle]

Yes, this would end my relationship with Hulu. I'm sure some people on the inside of Hulu don't want this, but in the end the old business thinking takes over these people's thoughts...That thinking is called greed.

[libertyforall1776]

Agreed, don't charge. I think Apple will launch some sort of free service soon, though, based on their new HTTP Adaptive Streaming with H.264 video...

[celticbrewer]

Apple and Free in the same sentence? I wouldn't bet on it. Maybe if you have to buy some $1,000 device...

[katiepea]

yeah i've gotten to the point where, sans a few shows i wanna actually watch on my tv, just download shows, watch them on my blackberry when i have some free time, and thats that.

[infernoskating]

Hulu is an awesome site however I would never pay to watch tv on Hulu. I only use Hulu because it is more convenient then making sure that I am home in time to watch my favorite tv shows. If Hulu started charging to watch tv on their site I would sooner buy a dvr than to pay for Hulu.

[JuggerNaut]

If Hulu could build a decent (I mean better than the current) Client app and allowed me to download their content for for a limited viewing (you know DRM) capabilities, I might be willing to pay a subscription. But if they think that they're gonna sell me a subscription to stream video to me that will be all jittery/sputtery where i have buffer every 5-10 minutes just to maintain my sanity, then they're crazy!

[BtmnHatesRbn]

Hulu will die quickly after it does this. And the piracy will flourish once again.<br /><br />For many people, Hulu has become their thing to do every night, instead of watching normal TV anymore. They put their laptops on their coffeetables and do their normal TV routine. Two people I know of went so far, with their MacBooks, to buy those TV-out adapters and they watch on their TVs.<br /><br />However, nobody finds Hulu worth a dime. They'll simply go back to their normal TV viewing on a normal TV in Hulu wants money. After all, look at how Newsday just lost traffic when it recently became a pay site. Or Napster as the definitive case.<br /><br />Do this, and Hulu dies.

[BtmnHatesRbn]

I just realized I use two DVRs (one in the bedroom, one in the living room) for my TV viewing. I have no need for Hulu myself, but I'm in the minority amongst my family and friends (only one to own an HDTV, only one to own anything but a Wii, etc.)

[CyR00k]

If Hulu starts charging I stop watching, it is that simple.

[kayceeisms]

As a college student, I use Hulu every single day, two shows apiece. Even though I don't have any other [legal] options, once Hulu starts charging, I'm a goner.

[gsmiller88]

No matter. All of my shows are on CBS anyway, Hulu serves no purpose for me.

[malcarada]

The day Hulu charges for content I go somewhere else, I am used to free TV with advertisements and that is what I expect from Hulu. If I want to pay for films I will got to the cinema.

[clynx]

Nothing on tv and Hulu now is worth paying for. I can easily do without it. All of the internet isn't worth the current colluded fixed prices. I got my dialup and rabbit ears and that is spending too much for what i get. So glad our tax dollars went towards all that fiber optics that are not being used.

[karpenterskids]

The comments speak for themselves: people do NOT want a subscription service on Hulu.<br /><br />The only thing that made Hulu what it is today was the convenience and freeness of their website.<br />The instant they start charging, both of those appealing factors disappear.<br /><br />If you absolutely HAVE to gain more revenue, however, you should give the site visitors a choice between a subscription or watching 2, 3, or 4 times as many ads as normal, to compete with the amount of ads found on TV.<br /><br />That way, at least, you'll only alienate half of your users, instead of 99.9%.

[ofmyony]

We already have a Hulu subscription service its called Watch Instantly (Netflix).<br /><br />I think Hulu should charge, but for only new services. Hulu should leave its current service alone, it works well people like it and they are making some money.<br /><br />Charge for<br />hd streaming, pay per veiw or live events, new original content, a commercial free version, new release movies like HBO does.<br /><br />Good luck Hulu just tread lightly.

[celticbrewer]

Thank you! Why pay for hulu when most people already subscribe to netflix? <br /> <br />Content isn't free, fine- we accept that. Offer the choice: More ads, or pay for a "zero ad" subscription. <br /> <br />Sounds like Crackle is the new Hulu. I'm glad I can stream both on my PS3.

[NervClaX]

I thought HULU blocked the PS3. You must be using a PC to stream it to the PS3 and then the TV, right? Annoying, isn't it? Why doesn't HULU just give up on blocking their site already? <br /> <br />Anyone know a workaround that doesn't involve a PC?

[roncleaver]

that;s when thet lose me.