So Much for Free as Business Model
With its media company parents breathing down its neck to turn a profit, the online video site Hulu announced a subscription service today that charges $9.99 a month for access to older episodes of popular television shows.
The more recent episodes of the shows will remain free.
But Hulu now must navigate the challenge - or risk - faced by every other commercial Internet site that has contemplated shifting from an ad-supported to a hybrid or paid model. It's too early to judge the Hulu may be a victim of its own success. People viewing Internet TV have grown accustomed to accessing content without charge.
In a post on the Hulu blog, CEO Jason Kilar wrote that the company was offering "a fair price" that would cater to customers accessing their favorite shows.
"Hulu Plus is a new, revolutionary ad-supported subscription product that is incremental and complementary to the existing Hulu service," he wrote. "For almost all of the current broadcast shows on our service, Hulu Plus offers the full season. Every single episode of the current season will be available, not just a handful of trailing episodes."
The announcement had been expected for some time. Hulu's corporate parents include News Corp., General Electric Co.'s NBC Universal, The Walt Disney Co. and Providence Equity Partners.
The new site is initially available by preview invitation only on computers, Apple's iPad and iPhones and certain Samsung Blu-ray players and TVs. It's coming to Sony's PlayStation 3 and some of its TVs and Blu-ray players, and there are plans to launch on Microsoft Corp.'s Xbox early next year.
The paid section will show the same number of ads to viewers as on the free site, but it has more content available. Subscribers can watch shows in high definition at up to 720p, compared with 480p for free. Automaker Nissan Motor Co. and Anheuser-Busch InBev SA are advertising partners for the launch.
Vendors are still trying to figure this out but there's undeniable interest in the space. Earlier this month, for instance, Fox Interactive Media announced a move into mobile video with an on-demand service called Bitbop that will allow Blackberry users to watch TV shows and movies on their devices. AP contributed to this report