Reports out of the Broadcasting & Cable “OnScreen summit” yesterday quoted News Corp deputy chairman Chase Carey saying Hulu could begin charging for services as early as 2010.
People don’t need to get too worked up about this if they read all his comments. The big problem Hulu has is it can’t charge for stuff that ABC, NBC and FOX online properties are giving away. If that happens, they might as well fold up shop because people will just go directly to the networks web sites and watch for free.
But Carey seems to understand this according to Broadcasting & Cable’s Claire Atkinson:
Carey says that while throwing up a pay-wall around all content is not the answer, it doesn’t mean there wont be fees for some specially-created content and TV previews. Windows are just around the corner. American Idol audition previews anyone? Mobile Hulu is another potential way of making money.
Here’s who needs to be worried: people who don’t subscribe to cable and are watching stuff on Hulu like my new favorite show, FX’s Sons of Anarchy. Currently there are a few free episodes available on Hulu (and on FXnetworks.com) though new episodes lag by ~8 days from original air date. I’d look for those kinds of shows to go behind a pay wall, on FXnetworks AND on Hulu. Why? Because FX makes its money from a combination of advertising and carriage fees. Giving the content away to people who are already subscribers isn’t really a problem, but giving it away to people who aren’t is.
Much of the “TV Everywhere” notion that cable is touting these days has to do with giving paying subscribers access to content they are already paying for online. But they’ll need to figure out how to validate those customers, and in cases like Hulu’s they’ll need to figure out how to charge the people who aren’t paying.
I understand that will irk some of the people who weren’t already paying for access to the content. But sorry, screw you if you think you’re entitled to have for free what others have to pay for. Why should we paying customers subsidize your free access? We shouldn’t!
The bigger short term challenge for online video though is this: they need to figure out how to start inserting more commercial spots in the online content.