Saturday, May 1, 2010

More on the Hulu Plus move

To recap: After much speculation, reports surfaced this week that Hulu will begin beta-testing Hulu Plus, a $9.95 monthly subscription at the end of next month. Some critics think the move is too late, others just in time. Some suggest $10 is too expensive, others too cheap. In a way, they are all correct.

On one hand, convincing users to pay for something they could use just last week for free is a dicey plan and could lead to a backlash against, and migration from, Hulu.

Plus, $10 is a steep price to start with, even in testing. As I suggested a few months back, various tiers — $5, $10 and more — with different levels of content access might be smarter economically and regarding brand loyalty. And without any iPad or iPhone application and any non-computer-related delivery system period, paying for content most people already received through their cable service is not that appealing.

On the other hand, the content most people seemingly access Hulu for — watching last night’s or last week’s episode they missed — will still be free under this new pay system. That means the Hulu Plus subscription could open up entire series archives to a user, and perhaps people could find value in $120 per year for access to all seasons of popular series such as “24,” “Lost,” “The Office” and maybe even some old, not-currently-on-the-site series. However, it’s still unknown what will be offered behind the Hulu Plus wall, making this all speculation.

But if Hulu Plus gets off the ground successfully, perhaps with an iPad application, the game will be changed.

At that point, Hulu would then surely introduce different tiered and even bundled models as an attempt to bring in more revenue and users. It wouldn’t be a shock to see them offer two distinctive services based on users’ access to cable, maybe $5 to $10 for those who pay for cable, $25 or more for those who do not. Or even two distinct models for people who can stand 30-second ads and those who cannot. Throw in bundles and some a la carte options and Hulu could suddenly turn into this decade’s iTunes store.

Those moves could lead to an intense competition between Hulu, iTunes and Netflix because Hulu could start to offer a combination of the services the other two already do. Hell, the cable companies might want in on the fight as well.

For the television and film industries, there will be more desire to produce Hulu-only content thanks to the additional revenue coming in. Networks and companies currently on the outside of the Hulu reach such as Viacom and Time Warner might join in. It wouldn’t be shocking to see some sort of views counter introduced either, to give studios and fans more of an idea of what’s hot and what’s not. Finally, there would surely be more legal battles over online streaming fees and royalties.

For fans, it will be a time of transition but will ultimately lead to a better user experience. Once the application comes along, users will be able to access their Hulu accounts from their computers, smart phones, iPads and definitely televisions. We can also expect more customization — playlists, better search tools, recommendations and more — once Hulu grows in stature.

Hulu’s introductory move could serve as a watershed moment for the monetization of online video streaming. Or it could be a substantial failure. But no matter what the results are, Hulu’s play has crucial implications for viewers and industries alike.

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