Hulu has formed itself into one of the largest
video streaming websites on the web. It still has a only a fraction of the
traffic YouTube offers, but many consumers and users of the web know that the
content on Hulu is usually of much higher quality than the content on the
average YouTube video.
The major networks behind Hulu have been offering
their programs on Hulu free of charge since the website launched. The recently
Plus service gives users access to more content and the ability to stream
content to game consoles, tablets, and smartphones.
The Wall Street Journal reports that Hulu is now
negotiations about a significant change in how it operates.
The video streaming site currently offers its
content for free, but the internal negotiations are reportedly in consideration
to change directions completely and transform Hulu into an IPTV cable provider.
Apparently, the major backers of Hulu including NBC Universal, News Corp, and
Walt Disney are at odds on the business model with some worrying that offering
the programs for free online is undermining the value of the content via other
sources like DVD and reruns on cable TV.
The revamp of Hulu would have the company offering
shows to paying subscribers on demand when requested. The idea is that it would
be along the lines of some of the program blocks that pay TV providers like
cable and satellite offer. The WSJ
reports that Hulu managers know change is inevitable. Hulu CEO Jason Kilar
said, "When we blaze trails, which is what Hulu is about, it takes time.
“That is not for the faint of heart, and we understand that."
This comes on the heels that the number of U.S.
homes that pay for cable or satellite has dipped for the first time after
decades of growth. Hulu's backers fear that offering the programs for free online
is simply training generations of TV watchers to feel they don’t need to pay