Problems with Hulu’s New Monthly Subscription

  • Published in Film + Web

Hulu just announced a monthly fee of $10 to view part of their video portal:

  • Cost is a dollar higher than a basic NetFlix account, which provides a larger archive of disc and streaming media, plus an 11-million strong subscriber base (according to a onetrack.com whitepaper in 10/2009)
  • Quantity of advertisements on Hulu is slated to increase, not decrease, to be similar to the quantity on broadcast television
  • Subscription fee unlocks older episodes, rather than allowing users to see new episodes earlier or another kind of exclusive; right now a show is posted a whole day after its aired on television
  • Torrent and other bootleg sources make watching television shows for free (and often ad-free) easier than ever
  • Inventory is still slim and broadcast network-centric, whereas paying a cable bill gives you hundreds of options all day and night
  • “Train viewers to pay” is a statement mentioned in the Los Angeles Times report, but they’ve got it backwards: consumers have the upper hand online (see: “you” in YouTube)
  • Each show’s last five episodes is still free on Hulu
  • Most of Hulu’s offerings are locked to U.S. viewership only

Some recommendations for Hulu:

  • Compete with cable/dish providers by providing DVR-influenced ad-free experiences for paid subscriptions
  • Compete with series DVDs, where you can catch up on past seasons of a show, which follows the lead of some NetFlix offerings; follow the lead of TBS, as noted in recent New York Times coverage
  • Play nice with the Wii and other systems like Roku that can deliver HD media to your television; MediaPost has some coverage on NetFlix’s success with cross-platform usability on the Xbox 360, PS3, Apple TV, and Apple iPad
  • Provide ad-free and improve quality, offline viewing in order to one-up torrent downloaders
  • Figure out a way for the actors and crew to get paid fair royalties for all this

Time will tell if this is a successful business model for Hulu, which has $100 million in revenue from advertisers. Popular shows like The Daily Show and The Colbert Report are streamed on their official web sites and left Hulu about a month ago. Will NBC, ABC, and other network sites who stream their shows start charging?


Aaron Proctor
Founder, FWD:labs
Director of Photography site


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