Hulu Plots New Script
Just as the digital wave transforms the television industry, Hulu, a pioneer of Internet TV, is in internal discussions to dramatically transform itself. — The free online television service has become one of the most-watched online video properties in the U.S …
Context & Ripple Effects
Hulu arrived in October 2007 as an ad-supported free service good enough that early hands-on reviews crowned it "brilliant" (GigaOM's first-week verdict). By late 2010 it was already layering paid on top of free: the Hulu Plus subscription tier officially launched in November 2010, followed within weeks by confirmed rollout plans for TiVo's Premiere DVR and new playlist and browsing features on the site.
What the Wall Street Journal reports today is a more radical step under discussion internally — per the unconfirmed reporting echoed by Electronista, Hulu may add live TV and abandon the free format altogether, with its free ABC and Fox content possibly migrating to iTunes instead. Because Hulu is confirmed as one of the most-watched online video properties in the U.S., and because it is owned by the very broadcasters whose shows built its catalog, how it repositions itself sets the template for whether network-backed Internet TV can become a business rather than a promotional window.
First-order effects
- If the rumored shift goes through, Hulu's large free audience loses open access to ABC and Fox shows unless they repurchase them through iTunes — converting the site's reach into a paid funnel overnight.
- Adding live TV would move Hulu beyond next-day catch-up and put it in front of viewers at the exact moment its paid tier is expanding onto living-room screens through Hulu Plus on TiVo.
Second-order effects
- Apple's iTunes stands to gain a marquee role as the retail outlet for broadcast content, shifting leverage over pricing and packaging from the broadcaster-backed venture to an outside distributor.
- The networks supplying Hulu would hold a credible alternative channel, weakening the joint venture's position when it negotiates rights renewals — while any live-TV offering forces cable and satellite distributors to start treating Hulu as a competitor rather than a marketing partner.
Third-order effects
- If the pattern holds, Internet TV splits decisively from its free, ad-supported origins toward subscription and live bundles, with content owners monetizing directly through retailers instead of subsidizing neutral platforms they partly own.
- That repricing tests a structural question for the industry: whether broadcaster-owned streaming ventures can charge audiences for programming that defined their free growth, or whether the free tier was always the ceiling of what the coalition would tolerate.
The trend: Internet video is pivoting from free, ad-supported catch-up libraries toward paid and live offerings — one data point in the broader migration of television economics onto the web.