back to article Hulu headed for subscription service scheme?

Hulu's days as a completely free internet TV outfit may be numbered if News Corp.'s new digital chief gets his way. The service is currently only available in America, although a UK version may arrive as early as September. But will it remain an entirely ad-sponsored font of television and movies when it crosses the Atlantic …


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  1. Nick L

    no ads please, we're british.

    if anybody thinks i am going to pay a subscription fee to watch adverts they are seriously deluded.

  2. David Simpson
    Thumb Down

    Kill Hulu

    Yes why not completely kill Hulu by making it subscription based, big media needs to realise the gold rush days are over, I'm looking forward to Hulu arriving in the UK but I will not be paying subscription fees for something I have to stream over my internet connection which I also pay for, I'll stick to free content and torrents, If he really wants to ween people off free content then give us an ad supported alternative to P2P.

  3. Ian

    Good luck

    ""I don't see why over time that shouldn't happen," Daily Finance quoted him saying. "I don't think it's on the agenda for Monday [but] it seems to me that over time that could be a logical thing.""

    Yes, that's because you apparently don't understand the internet Mr Miller.

    In your greed for more money you will just give people an excuse to resort to piracy and really that is what it comes down to, greed for greater profits.

    The fact is the ad model provides enough money to cover costs and make a profit but there is indeed a cap on the profit that can be made using this method unless you increase your audience.

    Changing to a revenue model has historically been an easy way to increase revenue greatly, but that assumes you can't get the content free elsewhere anyway which on the internet, with easy access to piracy, you can.

    So by trying to increase profits and forcing people into a revenue model you'll leave people questioning why they should use your service at all and they'll go back to piracy. Right now people would rather use it to be legitimate, but start charging them and that's no longer incentive enough.

    His advice to web companies to ween people off free stuff is idiotic, web companies have moved to that model because on the internet it's a model that works whilst subscription services simply do not.

    Miller seems to be a guy with a business sense that hasn't kept pace with the world, he is effectively a relic who appears to have been unable to keep with the times. If they truly allow him free reign to do as he will you can guarantee Hulu will be another service like the remodelled Napster and so on condemned to the history books before it ever even really made it's way out of the US.

  4. R.E.H.

    I for one welcome our micropayment overlords

    Seriously, I am tired of the attitude that everything on the internet should be free and that ad revenues are a viable way to sustain a business.

    There is only so much advertising that you can shove down the throat of consumers. It is just advertisers advertising for advertisers advertising for advertisers at this point. It is just a bubble that is going to burst sooner or later.

    That's not to say that it is reasonable to expect me to pay $25/mo for a service that used to be ad sponsored when I know full well that the advertisements you served to me brought you a grand total of 4 cents of revenue. Let's just be realistic- you bill me for 8 cents instead of 4, you make twice the money, we can all go home and I can stop looking at ads for pointless bullshit I don't need or want and will never click on.

  5. Wade Burchette

    The definition of stupidity

    To do the same thing again but expect different results is stupidity. Big media wonders why people steal all the while they are pricing themselves right out of the business. If it wasn't so true it would be sad.

    If these execs were a business like most other businesses (unless you are a bank or make cars), they would fail due to the stupidity of the business model. Adapt or die. Some other business comes along which has adapted and replaces the dinosaur who failed to adapt. But hey, it is a cruel world and you failed to change. No pity. The net result is deadwood is cleared out and a younger more dynamic company replaces it.

    However, the music and record industry are unique and they know it. They have enough power to bribe Western governments to make favorable laws to them. The problem is, the dynamics still change and the media dinosaurs don't want to change. So what you have is the problem we have today: a collision between the new and a stubborn refusal to adapt to the new aided by the legal system.

    What the music and record dinosaurs don't realize is that you can only fight the inevitable so long. You can only keep your finger in the dike for so long before it bursts. And now they made enemies, namely the consumers who will help you adapt. So when the inevitable eventually comes, no one will cry.

    Hulu micropayments is a continuation of the failed policies of yesterday.

  6. Tony Hoyle

    @Nick L

    Paying to watch adverts works for Sky Subscribers.. there's more money in that model than you'd think.

    OTOH Hulu, with its relatively poor quality videos of stuff that's mostly been on before (except some stuff that's only old in the US.. you can bet that content won't be on the UK version) just doesn't warrant a subscription. At least with Sky it's reasonable quality that doesn't *totally* suck on a decent TV.

    If they make the UK one subscription and the US one free.. then everyone will realize it's cheaper to pay a proxy provider, as they do now.

  7. Allan Rateliff, II
    Paris Hilton

    He's just blowing smoke out his ass

    Why Hulu Is Winning the Online Video Race

    Estimated $65m in revenue with $12m in profit last year, and estimating $175m in revenue this year.

    Not enough, Miller? The reason why you do not see any reason why Hulu would not move to a subscription service is because you are holding on to an antiquated business model.

    Just the same as cable customers have screamed for a-la-carte services for many years, only paying for the channels used rather than bundles, Internet users like myself are only interested in "paying" for the content which we consume. And we pay in watching advertisements.

    And we have proved to you that this model works. And yet you still cling to the Old Ways. Your sad devotion to that ancient religion has not helped you conjure up news paper subscribers, or given you the clairvoyance enough to find the rebels' hidden fortress.

    I support, and advocate for, Hulu because finally someone got it right; finally someone is able to offer free content and turn a profit. And you will surely phuq it up.

    Paris, turning profits by phuqn things up.

  8. Roger Tompkins

    Netgrits on Hulu illusions

    These morons amaze me. They have a brand new site with an idea that actually works and they want to leverage this to take on everyone from Blockbuster to Comcast. They want more. More, I say! This, instead of the time-intensive process of building their business. These people bore me. Why don't they just go bust now and save us all the drama. Morons to the core.

  9. Camilla Smythe

    Fucking Internet!!!!1!!!!!

    And I had to take my pinky off the shift key.

    Feh.... Local [not] 'captive' audience makes Biggums. Scroffle Scroffle Scroffle.

  10. Keith T

    subscription based high definition version?

    Might it be possible to have a subscription based high definition version?

    Low definition free.

  11. Trokair

    Go DIAF

    Hulu is a great site right now and it turns plenty of profit (as seen above). I figure when you can afford a Super Bowl commercial, you are fairly well off. I used it for a year and a half instead of buying cable and I check it at least 5 times a week to see episodes I may have missed from some of my favorite shows.

    That said, if a payment model were injected I would abandon the site in a heartbeat. So would a huge portion of Hulu viewers. It would probably destroy the site.

    So in conclusion, please go DIAF Mr. Miller, before you enact a terrible idea that destroys an awesome site. Thank you.

  12. peter Silver badge

    *micro* payments?

    Fine by me if he wants to give it away that cheaply. But, speaking for myself, I'd happily make milli-payments - you know, a few 10^-3 of a sterling per view.

    It's okay I didn't bring a coat - I trusted the English summer...

  13. Richard Kay

    People will pay for timely quality content

    Subscription is more likely to work when there is a strong enough community based around the content in question, and it is provided in a timely manner. transferred from a failing ad driven attempt at a business into a sustainable subscription driven one when its writers were about to pull the plug but its readers didn't want to let it go. They took a couple of months to persuade the bank that the sudden rush of small credit card payments were legitimate though when the readers persuaded them to sell subscriptions. What they now do is provide all content for free but restrict premium content to subscribers only for a period of a week. So there is no incentive for a subscriber to put premium articles onto P2P - given that those who want it for free can get it soon enough, and will contribute in a minor way through advertising when they get it from the site directly rather than through P2P.

    Frankly micropayments for occasional readers are too much hassle, and this model has never taken off. If a publication has enough regular readers a yearly subscription to the entire publication shouldn't cost very much - I get for $60/year and pay yearly.

  14. Tom


    Micropayments? But if you had the relatively free movement of money that the internet could easily achieve -I'd gladly provide a 0.1%/1p per transaction money transfer service if the powers that currently own the money system would allow it - you'd put all those poor parasitic bankers out of business!

    Like Richard Kay says people will pay for quality content. So that's my money safe in my pocket - if its anything like the music industry where you have to pay for absolute rubbish with no recourse to a refund.

  15. CC
    Thumb Down

    Dumb and Dumber

    And with fee based system they will undoubtedly do like cable TV did and increase the advertising and commercial breaks so that you get for every three minutes of program 7 minutes of commercial but with that and their subscription fee they will get to watch their user base shrink like a rock.

    I can see some movies or programs could be pay per view, but HULU is not the only game in town and if they mess too much with what they have they still risk vaporization all together cause people on the net are accustomed to getting it for free.

    If they can't make it the way they are now then they are doing something seriously wrong.

  16. Anonymous Coward
    Anonymous Coward

    I can tell you why it should remain free...

    Because of US TV's transition to digital in just a few days... With a simple antenna, and a converter box that I got for free from the Federal Government... I've got 30 channels of HDTV content... FREE FOREVER! Why on Earth would I pay for convenience when I finally have a flawless picture and sound for nothin? HULU will die if they begin to charge in this country.

  17. Anonymous Coward
    Anonymous Coward

    The nature of information brokering has changed

    The technological curve has advanced enough now that locking down information be it a book, movie, or software program just is not going to work. DRM and copyright law may slow the inevitable, but it won't stop it. The corporations that understand the paradigm shift realize that locking away content won't work, rather offering value added sorting of the content is what must be done. I would not pay hulu just to watch content, but I would pay a subscription fee if hulu had free content but for a fee tailored and pushed to me shows based on my past viewing patterns based so I don't waste time hunting and seraching through all the (free) content for stuff I like.

    Here are some case studies of who get's the new paradigm and who doesn't:

    Old failing model New model

    software Microsoft, Apple Cannoclial, Redhat, IBM

    music DRM locked iTunes, Zune Ogg Vorbis music players

    phone iPhone Open Moko, Linux phones (Android)

  18. Jimbo

    I would pay ...

    "Seriously, I am tired of the attitude that everything on the internet should be free and that ad revenues are a viable way to sustain a business."

    totally agree with you, personally I would pay for HULU if I could easily connect it to my TV (using simple cheap streaming box with decent remote). Maybe I would even get rid of $50/month DirectTV, I don't have HD TV, I stream HULU from my PC to TV and the quality is very good

    I'm sick of watching creepy 2 minutes YouTube home videos with 200x200 resolution (yeah it's free but dancing babies, barking dogs and drunk guys are really not what I want to watch)

  19. Andrew Tyler

    Good luck with that.

    They're going to need much better content updated much more frequently for me to consider paying a subscription. And as mentioned, if they want a subscription *and* advertisements: no way in hell. Strangely, Hulu was the first service where I didn't really mind watching advertisements. One 30 or 15 second spot where there would normally be a 2+ minute commercial break is fine with me. That's how they ought to do it on normal television as well. 30 seconds isn't long enough to make it worth fast-forwarding, isn't long enough for me to wander off to fix a drink or change the channel and, really, isn't even long enough for me to space out, so I actually watch the commercial and more or less pay attention. They've found the magic balance. Downloading bootleg torrents surely wouldn't be worth the hassle in comparison.

  20. Scott Howell

    Why Use Hulu?

    I prefer Hulu over other online streaming alternatives because the quality is better. I put up with the availability delays and ads in the bargain.

    If Hulu embraces pay or go elsewhere, I'll go elsewhere. If I wanted to pay for TV, I'd buy one and sign-up for cable. Why would I need Hulu? It would cease to be an alternative, and become just another bad idea..

    I'll take my coat and find a place more to my liking.

  21. Stephen Sherry

    The internet isn't's damn expensive!

    I dropped my cable subscription due to financial reasons, plus many of the shows I watched were offered already on Hulu, or were cancelled. I wasn't that concerned about not seeing things when everyone else saw them, because I don't care that much about talking about mindless crap. ALSO, most of the tv shows I watch are aired on their home web sites... for free to the user with adds? So them making me pay to watch shows I could get at blockbuster at a better quality, and able to watch them in the comfort of my living room, or just get my friend who has cable and DVR to record it for me like I used to before I discovered HULU. I'd go over to his place and watch anything I missed, while giving us something to do while hanging out :P

    Oh yeah, my internet connection that HULU comes over costs money. In my mind, functionally speaking anyway, this would be like paying for premium cable service, then having to make micro payments for all the shows you watch. Those who run companies, who have never really been consumers a single moment of their lives, would never be able to wrap their heads around this concept. All they can do is figure out how many times they can charge us for the same thing as often as possible, like federal and state taxes :P We LOVE those, so obviously, we're going to be paying for what has turned into complete crap (TV/CABLE).

    The real problem for them is that they cannot come up with programming people are actually willing to pay for and they don't understand why. They blame downloading (which many of us do because there are some things that are just not good enough to pay for, though enough of us pay when we can when the content is decent and priced right, these payments are far too rare for their cash bins). Mainly they blame downloading because they are told it is a threat, not because they actually understand it as one. If copying was a huge issue it would have started a long time ago with magnetic tape. (it pretty much comes down to older people who run the companies not understanding... well... not understanding the present and last couple decades or more)

    I'll give HULU whatever time they officially give it before they pull the plug. Whenever they put a plan like this in motion they wait for things to fill some expectation, but most of the time with entertainment programming nowadays, they have no clue, so their expectations can be anywhere and everywhere. We can assume the plan will fail, and they will in fact pull the plug. As far as the facts they see, all they know is the adds aren't set up right because the advertisers aren't taking the internet seriously enough (and they don't have the cash in advertising anymore to advert everywhere they really should be in this new media age), and all the owners see are the number of individuals hitting their site and it's probably getting close to a city sized load of people who they see as freeloading (even though they are already paying a large monthly fee for internet. Not everyone is rolling in cash you know :P )

    There's a lot of competition on the internet for fee based entertainment, and I have to say, Hulu is literally on the bottom of my list. I get more shows chipping in for my friends expensive service and asking him to record crap for me. Remember when Napster became paid for? If Hulu is to realistically succeed, they would have to make the payments so low no one cares, and that's just not enough money for a company like news corp, or else they would beef up their adds. What companies that advert need to do is go around and see who they should be advertising with, instead of taking their lead from media companies. The 3 or 4 shows I watch I can only get on cable/satellite/or hulu, but I can live without if I can't afford it. Honestly, if I were the cable stations, I would try to get into the digital TV market as fast as possible. The traditional media cash hungry monsters just can't pull it off anymore, too many customers have taste, or individual tastes, that generic crap just can't fill anymore. And let News Corp own the cable ways, like Howard Stern owns the satellite radio business. I can count everyone I know who listens to satellite radio on one finger :P

    Not saying it isn't able to serve the people who spend a long time on the road, I'm just saying it is too damn expensive for the casual drive to work driver. And that is pretty much where cable tv is headed if they keep carrying themselves like they have been (not just cable tv, but any media stream, or product for that matter). No matter how great you think something you're selling is, if it's too expensive you may as well just horde it for yourself because no one is going to buy it, and they will just resent you for letting them know about whatever it is that is supposedly cool, and that you're holding it over their heads basically saying "look what you can't have" like a mean older sibling :P

    The Worst part is, the media companies actually want you to have what they are selling. They have this insane need to be exclusive, like they can pick their audience, and yet they also want everyone to buy what they are selling as well. They don't realize that when their audience is very small, the rest who might download what they have are treating the content as a curiosity, not something they can't live without. It's more like, "I wonder why so-and-so likes this show so much? oh no it's canceled, nap time." That's what actually goes through most people's heads when it comes to most shows. Watching TV is like watching the circus. People actually get on fine after it is gone. And when they keep canceling everyone's shows, why would people feel the need to keep watching to see what they are coming out with next. A lot of good shows get missed because of this dynamic now, the people who would be getting into the show aren't watching it. Media companies should just go to the public tv model like the BBC, it can only help :P

    With taxes paying for entertainment, I don't think there would have been so much crap on television. Boring is more tolerable than crap, and the parts that are actually entertaining are already about even between our two models (only due to the few big budget shows produced over here in the States). The random good shows, unlike on the bbc, don't come back after they leave, with few exceptions. Who wants to get into a show anymore if they are just going to end it abruptly because they know it's going to be canceled, or never end because the writers hoped they would get the budget for another season. That's why HULU is so popular, no risk to the customer, and in some cases, the ability to watch a whole series uninterrupted so you don't forget what is going on. Or see movies you might never have even bothered to get from the library :P

    But I'm in IT, so what do I know. Just that no matter what happens, I'll fall back on the library for entertainment if they keep going in the direction they are heading (everyone else will go back to sitting on their porches and watching traffic). But for the moment, whatever is included in my monthly fee for my ISP is good enough for me. If they start charging for the shows I like on hulu, I'll just go back to watching it rerun on Korean websites :P ugh The price has to be really low. When people have billions of dollars, it's hard to know what they mean by "micro-payments."

    Mine's the one that says "AAAARGH, WTF?!"

  22. Jimbo

    Why Use Hulu?

    "If I wanted to pay for TV, I'd buy one and sign-up for cable. "

    Why do you need cable if HULU would stream to your TV using a box similar to your cable box? If the content is rich, the quality good and the price right, why would you pay $50 for cable? HULU is on demand (you discover new cool show, bingo you can watch all episodes).

  23. Kevin McMurtrie Silver badge
    Thumb Down

    Standard destruction of a good idea

    Producers will scream "Pirates!" and demand DRM. Cable companies will threaten to block bandwidth-sucking competition, so no Hi-Def. Marking will come up with numbers showing that customers are too stupid to get their own H.264/AAC player, so video will sputter and stumble through Flash. Advertisers will remind execs that ads are practically free money money money, and then there are ads.

    Now you have a product nobody at all will pay for. Hulu investors will wonder why a sure-fire business plain crashed and burned.

  24. fishman

    Regular broadcast shows

    We use Hulu to catch episodes we miss. We also use it to start watching shows our friends recommend. Without it, we are less likely to continue watching the broadcast episodes since we would fall far enough behind to stop caring.

  25. Joseph Harris

    advertising ebbs and flows

    The BBC in the UK sets a standard, as someone points out. But the model of compulsory subscription [not taxation] and free at point of use poses problems for other providers, solved by advertising. However all commercial tv in the UK is now wilting for lack of ads.

    The problem in the US is different, as this excellent discussion makes clear. And the (almost) all advertising base with a good streak of subscription is under strain.

    The net has developed differently. It was seen as a number of things, but for commercial use it seemed a marvellous advertising and then sales point. It was this that placed so much emphasis on 'free'. Later the process of deriving income streams from advertising became a major model.

    As others point out., putting material on the net costs, receiving it costs, and originating costs -whether in time or money.

    But the underlying marketing and sales and business models are not new, just recycled. Just as the net is new technology but fundamentally no different from all other distribution and usage problems.

    And the problem now, one that faces all media, is that advertising is disappearing in the recession. If, as some think - myself included, this is a long low downturn [perhaps a depression] that disappearance is likely to be like the Cheshire Cat, not much left but the grinning teeth of memory.

    Of course this will test every supplier; those who think they will not be able to continue as viable businesses with advertising are starting now to develop the appropriate payment and subscrtiption models. They are not all going to survive and those that do will be slimmed down.

    For consumers there will be a lot of rethinking, even if they are pirates, since one can guarantee that those taking what does not belong to them will be hounded increasingly severely. Most arguments for the continuation of 'free' do not have commercial resonance, whatever philosophy may be called in to support such views.

    The price of continued and unchecked piracy may well be the end of major investment in entertainments, such as blockbuster films [movies]. That might be a price those who like them will have to pay on behalf of pirates.

    At all events, my forecast is that the 'free content' net is in its last days for some decades at least.

    Joseph Harris

    Debt Control Man

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