The Hulu Free TV Reign Could Soon Be Over

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Hulu is an amazing success story, brought about mainly by the fact that it had quality content that was free to watch, but the free reign may soon come to an end.

The Catch up TV website is currently planning to charge viewers to view episodes of "30 Rock," "Modern Family" and "House." The development could be the beginning of a marked change of course for the venture, which was launched nearly two years ago and boasted of distributing tv streams for free across the net.

The website has spent months studying how to strike a balance between what people expect to watch for free online and for what they would be willing to pay, according to a person familiar with the matter who was not authorized to speak publicly.

Watch Hulu And Pay

One plan would allow users to view the five most recent episodes of TV shows for free, but require a subscription of $4.99 a month to watch older episodes. Hulu believes it will need at least 20 television series — both current and those no longer on the air — to make such a pay service attractive to users. A firm pricing model could emerge within six months, they said.

Although Hulu declined to comment, their plan to charge for some content comes as many publishers are similarly grappling over how to get people to pay for online content they've long gotten for free.

Last week, in a development that could have implications for embattled newspapers, The New York Times unveiled its awaited plan to charge online readers for stories. The Times will adopt a "metered" approach, starting next year, in which users can read a limited number of articles before being charged.

Pay walls

Hulu and The Times join a growing lineup of companies that are building pay walls around their content.

Internet radio company Pandora Media, which was entirely free, recently started charging users a monthly fee of 99 cents if they listened to more than 40 hours per month.

"The economic reality of any type of content is that you need people to put some money into the tip jar," said Tim Westergren, founder of the company.

That imperative has grown as advertising dollars flooding online is expected to slow. Research firm eMarketer estimates that online advertising will grow 40 percent this year, down from a 127 percent increase last year.

Boxee, a company that lets people pipe Netflix movies, YouTube videos, Pandora music and other online media directly to their TVs, last week introduced a way for studios and publishers to charge for on-demand content rather than rely on advertising.

"This lets content owners dictate the way they want to sell online," said Andrew Kippen, Boxee's vice president of marketing. "There will be more content available online, and there's not going to be one clear way to win. What we're saying is, work with us to try out some different business models and see what works."

TV across a range of hardware

Analysts say Hulu may be preparing to deliver its streaming service via an array of Internet connected TVs, game consoles and other devices that were on prominent display at the recent Consumer Electronics Show.

"The whole reason Hulu needs to consider a subscription model is that the long-term play for online video is not to computers; it's to a collection of other devices — connected TVs, video-game consoles," said Forrester Research media analyst James McQuivey.

In fact, Netflix has found that an increasing percentage of its subscribers use an on-demand service to watch movies through Internet-connected video-game consoles, Blu-ray players and other devices connected to the television.

Whilst Hulu has been a popular success, it has also become a pain for some investors, who see the site not as a defense against piracy or video phenomenon YouTube but as a threat to the economics of the television business. Cable operators, in particular, protested Hulu allowing free Internet access to shows which were previously available only to their subscribers. Hulu responded by reining in online access to certain cable programs.

Many media analysts expect that Comcast's plan to buy controlling interest in NBC Universal will give it a significant say in the future of online video, and accelerate Hulu's move to a paid service.

It is inevitable considering the free sites like Hulu and Youtube have struggled to make any money based on a ‘free model' and probably the best course of action is to charge for premium content whilst still giving a large percentage for free.

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