Hulu.com. The site, a popular web destination featuring movies and TV shows from content partners including Fox, ABC, Disney, and, of course, NBC Universal, reaches anywhere from 9 million to 42 million users per month, depending who you ask. Although the hosted content is currently ad-supported by way of commercials interspersed into the video streams, the company is interested in exploring other revenue options as well, specifically subscription services and pay-per-view programs.At an investor conference held earlier this week, News Corp. chairman Rupert Murdoch and NBC Universal CEO Jeff Zucker revealed that they were looking at new ways to help monetize their joint venture, the video-streaming service
According to a recent report from Multichannel News, Murdoch was quoted at the conference as saying "Are we looking at it with a view toward adding subscription services and pay per view? Yes we are." However, he was quick to add that "no decisions have been made yet."
NBC's Zucker also hinted at the company's interest in the matter. "Whether there are other ways to monetize Hulu down the road, it is something that we are open to, something we will explore," he said, but like Murdoch, reiterated "there are no plans at this time."
Subscription Services Already in Testing?
While that may be the official company line, other sites are reporting a slightly different variation on this story. The Business of Video blog, for example, says they've been in contact with sources who have confirmed that Hulu is already beta testing a subscription-based service internally and is working out the technical requirements. If that story is to be believed, the offering won't go live anytime this year as Hulu still needs to figure out the details of the business plan.
Whether or not that rumor is true, it wouldn't be surprising to hear that Hulu is working on such a project, given their obvious interest in adding more revenue-generating features to the site. Zucker himself even updated his ongoing conference comment about "analog dollars" being used to chase "digital dimes." (In 2008, it was "digital pennies.") "Certainly by next year the goal should be at least quarters," he joked.
What We Want to See: Premium Channels on Hulu
Subscription services would be a brilliant way to chase those quarters, indeed. Perhaps it could even convince cable-only paid channels like HBO and Showtime to get on board with the venture. They've already tentatively given iTunes a shot, but still seem reluctant to share current episodes in a timely fashion on that service. The reason for the networks' timidity is because their iTunes revenue simply doesn't compare to their cable TV subscription offerings or even their DVD sales. (Ironically, that's probably due to the fact that they don't offer current programs via iTunes!). Instead, they would rather entice consumers to subscribe by tempting them with their backcatalog of programming.
However, if the situation was to change and consumers could subscribe to these channels online for a comparable fee to what the companies generate through cable TV distribution, would they continue to put up such resistance? After all, money is money, who cares where it comes from?
These days, more and more consumers are pinching pennies by cancelling cable subscriptions thanks to the numerous alternatives available online. Obviously, premium channels are getting the boot, too. Imagine if they could have a chance to win back some of those penny-pinching former subscribers by way of an online subscription service. After all, what would you give for piecemeal plans that let you buy a 3-month pass to HBO instead of the all-or-nothing combo packages available via your cable TV provider?
Of course, all this is just wishful thinking on our part, but if Hulu does it right, the possibilities for their new TV distribution network are virtually endless.