Get Out Your Wallet: Online Video's Paid Model Is Starting to Emerge

Last Updated Jun 4, 2010 2:47 PM EDT

A year from now, don't be surprised if you're paying a few bucks to watch your favorite TV programming online. Video providers, unlike their print kin, are getting serious about adding a subscription model to their services sooner rather than later. The latest examples:
  • ABC is looking at a monthly online subscription model -- at anywhere in the $1.99 to $4.99 range -- which would give subscribers five recent episodes of shows and other perks, such as fewer commercials that usually play online with older episodes, and access to new shows immediately after they air on TV.
  • At the coming E3 show, Hulu is expected to announce it will bring a subscription service to Microsoft's xBox Live platform. Details are sketchy, but it's likely to work similarly to the Netflix streaming service on xBox, which consumers can access with an xBox LIVE Gold membership and a Netflix sub. (All told, it clocks in at slightly over $12 per month.)
  • Add to that Hulu's coming subscription service -- originally rumored to be launching last month -- and you start to have an industry that has enough respect for what it produces that it is going to make consumers pay for it. Of course, unlike many players in the print business, entertainment companies aren't selling commodity product, so maybe it's simpler. Still, the industry's players are smart to realize that the sooner they establish value for their content, the better.
While ABC and Hulu starting to charge for content may seem like a drop in the monetization bucket, it's easy to see how the rest of the TV content producers will start to fall like dominoes into a subscription model. If ABC starts to make money off of its subscription plan -- and ABC, along with other Hulu owners NBC Universal and Fox -- start to make money off Hulu Plus, why would NBC or Fox not bring some type of paid model to their own sites?

The biggest challenges right now are the particulars, such as what consumers think is worth paying for, and what isn't. But the dawn of the online video subscription model is upon us. Long live paid content.

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