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Hulu may use live TV, lose free ABC and Fox to iTunes

updated 01:45 am EST, Thu January 27, 2011

Hulu could move to bundles and toss free video

Hulu is considering a major shakeup of its business model that could move away from its free format and towards a paid service with live TV, insiders claimed early Thursday. While it wouldn't drop the current model, the service is pondering the option of mimicking cable services by offering live TV in package bundles as well as video on demand. The plan would still be under discussion, the WSJ heard.

More telling would be a shift away from free material. ABC and Fox are reportedly looking at pulling some of their free shows and would instead expand the amount of content they have at paid stores, such as iTunes, Netflix and the Zune Marketplace.

The reasons for the possible upheaval weren't specific, but it was likely the result of a mounting conflict over how the service should approach its business model. News Corp. president Chase Carey allegedly prefers the subscription model and helped push for the paid Hulu Plus service to get away from free, ad-supported business; he and backers reportedly objected to even offering the most recent episode for free. Hulu also had trouble when ABC offered an iPad app that gave streaming for free where Hulu Plus would charge money for the same material.

Hulu chief Jason Kilar has also worried that Hulu Plus could lose out to Netflix's model and proposed cutting the price down to as little as $5 per month where media executives, possibly including Casey, resisted the move. The $8 price drop was considered a compromise both to acknowledge the challenge and to keep Kilar from acting on a threat to leave the company.

ABC has considered starting up its own subscription service but might not ever launch it, the insiders added.

The approach if true would at once protect traditional TV by steering users towards paid material but could also serve as a true replacement, offering real live content instead of limiting users to day-after shows as on most Internet sources. Hulu has often deliberately blocked free access to its site from Google TV and other TV-sized hardware but could now have a full TV replacement that would still pay studios.



By Electronista Staff
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Comments

  1. Athens

    Addicted to MacNN

    Joined: Jan 2003

    +5

    Epic Fail

    I see this as a epic fail. I liked the service because it is free and can live with the ad's on the shows. If it became a paid service I wouldn't bother any more. Its already a pain in the arse because I have to use a Proxy to use the service. I have Netflix, if I did live in the US, I wouldn't bother paying for 2 online services.

  1. ezylstra

    Fresh-Faced Recruit

    Joined: Jul 1999

    +5

    Hulu is not FREE, it is SPONSORED

    Big difference between free and sponsored. Over the air television has lived for decades on a sponsored model. Hulu has followed that model, so far. Hulu Plus is subscription based with ad support. We should try to continue using the historic definitions of words instead of going along with marketing redefinitions.

  1. boris_cleto

    Fresh-Faced Recruit

    Joined: Sep 2002

    +2

    Hulu Plus

    Hasn't been enough of a failure for them yet?

  1. TylerDurden

    Fresh-Faced Recruit

    Joined: Dec 2001

    +3

    Hulu vs. Apple & Netflix

    This is why I'm an Apple fan and a Netflix fan, and not really a Hulu fan... In addition to the value in their products and services, it's also the vibe I get from the companies... Where the customer seems to be first, and the money follows. I don't see or feel that with Hulu.

    Apple: "Let's make awesome products that people will want to buy, then we'll make money"

    Netflix: "Let's provide an awesome service that people will want to pay for, and we'll make money"

    Hulu: "We want money."

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