The free video site Hulu.com, which has been helping to change TV-watching habits, could undergo a change. On Wednesday, an executive with one of Hulu's parent companies suggested the popular video site could start charging for content next year.
Chase Carey, president and COO of News Corp., told the Broadcasting & Cable OnScreen Summit in New York City that the value of the content presented by Hulu isn't being served by a free-only model, and he hopes that it will evolve into a subscription model.
No Decision Yet
According to news reports, Carey said "a free model is a very difficult way to capture the value of our content" and to deliver it in a way that makes consumers appreciate the value.
But News Corp. will not be able to make that happen by itself, and must work with its partners in Hulu -- NBC Universal, Disney and Providence Equity Partners. At the moment, Carey said, no decision has been made.
Carey added that a subscription would not necessarily be required for all Hulu content, but might include previews of TV-show and special content. Hulu is currently supported by ads.
In spite of Carey's comments, News Corp. spokesperson Jack Horney told the Associated Press that Hulu still thinks a free, ad-based site will have attract the most users.
Hulu has received praise for the range of its programming, the relatively high quality of its online video, and its innovative approach to online ads, such as allowing a user to choose ad frequency. The site has also grown into a regular viewing portal for many consumers, especially younger ones. It's not uncommon to hear that someone has seen a new show on Hulu, not on TV.
The Future 'Is a Subscription Model'
James McQuivey, an analyst with industry research firm Forrester, said Carey's comments are on target. "The future of Hulu," he added, "is a subscription model."
This has always been the model for the site, he said, "not just because it's the only way to make money in the long run, but it's the only way for Hulu to make its content contributors like Fox, NBC and now ABC stay interested for the long run."
McQuivey noted that, with a subscription model, Hulu can try such initiatives as delivering Hulu content to connected TVs and Blu-ray players. With the free-only model, he said, this delivery cannot be done "because that would alienate cable companies."
In fact, he said, a subscription-based Hulu might be available someday through the cable company, just as HBO is, and then the site's programming would be delivered to any device that the cable company services -- including not only cable TV, but also, for those with cable-delivered Internet, to Net-browsing devices.
McQuivey added that the key to selling Hulu subscriptions to consumers is not to say "we're going to charge you for shows that used to be free." Instead, he said, the approach should be "we can provide even more content and make it all easier for you to access on many more devices than you can today."