updated 03:10 pm EDT, Mon April 30, 2012
Hulu may shift wholesale to requiring TV service
Hulu may remove itself from contention as a pure Internet video service based on rumors overnight. The historically connected New York Post cited insiders who claimed the service would take the Fox authentication strategy, where customers must prove they have conventional TV access, and make it a broader policy. Fox's deal would see it soon talk to Comcast for a deal using the TV Everywhere imitative.
The decision was supposedly part of why one of Hulu's main investors, Providence Equity Partners, had sold its stake in Hulu.
Non of the involved parties commented on the assertions. With negotiations possibly still in early phases, details of the system weren't available.
Going the authentication route would be a gamble for Hulu. Much of its appeal has come from having major TV network content that wasn't contingent on being an existing TV subscriber or having signed up for a particular network. A restriction would hurt those who can't justify the rising costs of traditional TV as well as give Hulu little advantage over provider-specific services like Comcast's own Streampix.
Hulu is unique in the industry for having large stakes from CBS, Disney, Fox's parent News Corp., and Comcast's TV wing NBCUniversal. The relationship has at times been chastised for preventing Hulu from being truly disruptive, leading it to policies such attempting to block free Hulu from any device that might normally hook up to a TV. Concerns have existed that the networks, eager to protect ad revenue that's currently higher on traditional TV, would take further steps to discourage cord-cutting from customers who don't want mandatory channel bundles or the technical ceilings of non-Internet TV.
Pay-per-show services like iTunes may get an assist if Hulu takes the route, as they cost more up front but don't require regular TV and have fewer hurdles, such as disappearing content or mid-show ads.