Hulu's Pay Scheme: Bigger Digital Coins -- And A Brand Message
Hulu now enters the world of creeping media charges. It moves stealthily because few users will mind -- initially. And it's "creeping" because, in short, it's the distance between what subscribers paid a cable operator for monthly programming in 1989 -- and what they pay in 2010.
Hulu looks to charge for older episodes of current TV series -- but not more-recent episodes, which it'll keep free. So you'll be able to get the last five episodes of "House" for free - just not the season premiere from last September, or last season.
For consumers, the marketing of Hulu has been successful; usage is up for the video digital destination. It has positioned itself as premium TV next to YouTube's more everything-to-everyone TV.
Now Hulu is looking to speed up its goal toward profitability. And this may be only the start. Those four minutes of advertising time per hour to watch the likes of "Heroes" could soon turn into six or even 10 minutes -- similar to the messaging totals of traditional TV.
A big piece of Hulu users are those consumers who miss the initial showing of TV shows through traditional TV platforms. So the five-show rule would seem to work.
Interestingly, right now a number of Hulu shows don't have many episodes beyond the five to begin with. Hulu will continue to add to its library. Surely, that will be the big selling theme to consumers, something on the order of: "We are getting bigger and will give you more choice."
All media companies have used that line before -- just before they raise rates. Cable companies have worked that angle for years.
For many, the real failure is that Hulu hasn't gained as much from advertisers as they anticipated. Some TV producers say they haven't gotten much either from the Web site -- money they need to make up for losing fees in other areas.
This means executives at News Corp/NBC Universal/Walt Disney -- partners in Hulu, who have been floating the consumer fee idea for months -- will finally get to see if the next business phase of Hulu brings digital quarters, not just digital pennies.