Copyright Law

Hulu ?Plus? ? $9.95 p/mo for Additional Content

By Jared Moya

Will still offer the 5 most recent episodes of a number of popular TV shows for free, but subscribers will have access to a more “comprehensive selection.”

Hulu, the popular ad-supported online video streaming site, has been under pressure from content providers to increase revenue for some time now. Although the site turned a profit in the last two quarters and generated some $100 million in advertising revenue, they’re accustomed to a greater rate of return, and so far Hulu has failed to deliver on their expectations.

According to reports it plans to answer those concerns by offering a new subscription service called “Hulu Plus. For $9.95 p/mo subscribers will have access to additional TV episodes not normally available as well as a more comprehensive selection of additional content.

Regular Hulu users would still have free access to the five most recent episodes of popular TV shows, but viewing more episodes would require subscribing to the Hulu Plus package.

TV producers are apparently concerned with offering content free content after having seen have seen the grim results of what happened to the newspaper and music industry when confronted with the same. Millions of consumers flocked to free online services and left a lot of respective media companies with gaping holes in their bank accounts. TV executives can no longer justify offering the same TV shows for free, and want funds generated from quality video content.

These concerns were alluded to last October by News Corp. Deputy Chairman Chase Carey who said that ?it?s time to start getting paid for broadcast content online.?

?I think a free model is a very difficult way to capture the value of our content,? he added. ?I think what we need to do is deliver that content to consumers in a way where they will appreciate the value. Hulu concurs with that, it needs to evolve to have a meaningful subscription model as part of its business.?

It’s especially a concern as they simultaneous try to extract increased payments from cable operators and TV broadcasters to distribute their content. Offering it for free, or practically for free, since episodes on Hulu carry far fewer ads than those aired on TV, is no longer justifiable.

Hulu ranks second only to YouTube in terms of monthly video streams in the US, so it has great potential for reaping large returns if even a fraction of users subscribe to Hulu Plus. The only thing is however, users will still have a number of illegal alternatives to choose from. Hulu was initially created with illegal video streaming services in mind, and users flocked to the site because even though they had to watch ads, it offered quality content and selection. More importantly – it was free.

Charging people $10 bucks a month could undo all of their hard work.

Stay tuned.

jared@zeropaid.com

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Full post as published by ZeroPaid on April 23, 2010 (boomark / email).