Hot off the heels of a report saying that Hulu’s growth has begun to slow down, the CDO of News Corp, the guys who own all that Fox television content on the popular streaming site, recently reviewed that Hulu is considering charging for some of its content. For many a Hulu user, this is bound to leave a bad taste in one’s mouth. Yet if done right, a premium model could become an incredible source of revenue.
One of the big rules content providers have to remember is that they cannot start charging outright for material that was previously free. A simple model would be only allowing IP addresses to watch a set amount of video per day without singing into a premium account. For this model to work, Hulu would have to set a cap of at least two hours a day, if not more given the amount of television Americans watch. But even liberal restrictions on free content could lead to sufficient backlash that people would jump ship from Hulu to some other method for viewing content (such as torrents, which would deprive the networks of revenue altogether).
A better model would be to offer added benefits for paid users. An obvious one would be to eliminate advertisements for paid account. More to the point, Hulu could work with content providers like NBC and News Corp could agree to allow Hulu subscribers to watch shows before other users, so as they air rather than a day later. Again, the networks which put their shows on Hulu need to make sure that they do not just retroactively put shows online later for free users (this is most specifically directed at Fox, which waits for over a week before uploading new episodes of House).
When it comes right down to it, Hulu has the market presence to make much more than a pretty penny from implementing premium content. But the guys in charge of development at Hulu need to make sure that they do not let the networks talk them into using an antiquated model. In that way lies madness.
