Hulu To Launch $9.95 Subscription Model, Break Your Heart

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The Los Angeles Times is reporting that Hulu is set to launch a subscription model very soon–as early as mid-to-late May.  The price will be $9.95 per month.  Seems their admitted evil plot to destroy the world includes a monthly fee.

Under the new model, regular (non-subscription) users will be able to access the five most recent episodes of their favorite shows.  However, anything older than that… they will not be able to see for free.  That’s where the subscription comes in.

It’s called Hulu Plus–ooooh, catchy.  You know… as in “you get the same old Hulu you know and love, PLUS you get to pay for it.”

I’m baffled, even while I understand the drive for them to make more revenue.  For instance, what about this report from ComScore, which suggests Hulu is only serving half as many ads as the viewers are willing to accept?  The LA Times piece hints that Hulu’s backers–television and movie studios–are pressuring it to add subscription fees to help pad the bottom line.  Perhaps they grew impatient waiting for the ad revenues to grow to acceptable levels (as opposed to Google, who has exemplified patience in the way it’s handled YouTube’s move toward profitability).  It would seem to me that a site that rose to popularity due–in part–to the fact that it was free would try everything else first before resorting to a paid subscription.

And what would Hulu say to users that suggest they can take their $9.95 a month to Netflix and gain access to much more content than Hulu is able to offer?  It’s like the price was decided on because it was a catchy number, and not because there was any precedent.  Unless Hulu suddenly has the same inventory that Netflix does and I haven’t heard about it.

Some would tell you they saw this coming miles away… that it was inevitable.  Maybe they’re right.  I still am not sure it’s absolutely necessary, but hey… I’m a logical guy… I get that companies need to make money.  Sometimes you have to experiment a bit and risk tipping the boat over in order to find the right path to revenue.  I’m willing to let them dabble in subscriptions.  I’m not willing to pay for one.  But that’s my choice as a consumer.

Hulu has been, up til now, the second most popular website for streaming video (behind YouTube).  It’s possible this subscription move could cost them viewers.  Actually, I’d go ahead and say it’s definitely going to cost them viewers.  The real question is… can Hulu sign up enough Hulu Plus customers so that the increased revenue in subscriptions is greater than the advertising revenue lost when the content goes behind the curtain?

I’m hopeful.  I’m optimistic.  Because there needs to be a serious online competitor to cable TV–there needs to be several, actually.  I want Hulu to succeed.  But this has all the signs of a move made too soon, albeit with the best of intentions.  Some questions:  What happens to videos that are embedded on hundreds of blogs when they go behind the subscription wall?  I’m thinking specifically of Saturday Night Live sketches… will they disappear?  Or will clips of shows (such as individual sketches) still be free, but full episodes cost money?  What about the movies on Hulu?  The LA Times piece doesn’t mention how Hulu Plus will affect their movie selection.  I’d guess that a handful of films–the kind everyone has seen many times–will still be freely available, but the bulk of the library would go behind the wall.  But I’m only guessing.

There are many Hulu fans who will be crushed by this move.  Many of the 800,000 that we talked about two weeks ago who have cut the cable TV cord in favor of using the Internet to watch all their favorite shows?  To those individuals, this is a setback.  I’m willing to believe that Hulu can make a subscription model work–maybe it will need to evolve over the coming months and years.  But I get it.  I get that I’m not going to get all the TV I want for free forever without either advertisements or subscription fees coming as the cost.  I just hope they leave enough content outside the pay-wall to keep the majority of their visitors coming back.


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