Hulu to expand library -- by building a subscription pay wall(Read article summary)
Hulu will offer more TV shows than before, but viewers will need to pay subscription fees to watch them.
Hulu is a success. Over the past two years, this partnership between News Corp., Disney, and NBC has pulled in $100 million from advertisers. Now the second biggest website for streaming video in the United States, trailing only YouTube, Hulu has turned an operating profit for the past six months. But according to the LA Times, earning money isn't enough for Hulu's corporate parents.
"That doesn't come close to matching the revenue that these companies are accustomed to raking in from their more established businesses," the Times writes. "That's why Hulu is under pressure from its owners to collect a subscription fee."
While some users might gripe about Hulu asking for their credit card numbers, the site's plan actually makes a lot of sense. For the most part, everything that was free will stay free. The five most recent episodes of each TV show will remain open to all. However, the subscription plan will unlock episodes from earlier in the season.
Hulu will experiment with subscriptions – starting with $9.95 a month – to see what users are willing to spend.
"Television executives don't want to suffer the same fate as music industry or newspapers, which saw users flock to free access to songs, stories and classified ads online -- and revenues plummet," reports the LA Times.
For-pay episodes will likely still take commercial breaks – much like cable TV. Currently, Hulu runs about one ad per interruption, but according to the Times, eventually "Hulu is expected to adopt the same commercial loads as network television."
This move to monthly subscriptions is not a huge surprise. Hulu hinted last year that it would explore new business models. And in February, rumors suggested that an upcoming Hulu app for the iPad would come with a price tag.
Would you pay $10 a month for more Hulu? Let us know in the comments below.