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Hulu Obits Premature?

Is Hulu living on borrowed time? While that might be an overstatement, the site's owners have grown increasingly uneasy about its business structure, and the lingering fear that free online video cannibalizes TV and paying audiences.

"Its owners -- industry powerhouses NBC Universal, News Corp. and Walt Disney Co. -- are increasingly at odds over Hulu's business model," The Wall Street Journal reports. "Worried that free Web versions of their biggest TV shows are eating into their traditional business, the owners disagree among themselves, and with Hulu management, on how much of their content should be free."

As a result, sources tell The Journal that News Corp. and Disney are considering pulling some free content from Hulu in favor of paid platforms offered by Netflix and Apple.

"Friction among Hulu's owners and also between them and company managers over the direction of the service has been building for a long time," writes CNet. So, what has changed? "Now there are alternative Web distributors for the networks to work with, the dominant one being Netflix. The company pays cash to license content."

More dramatic still, Hulu management is reportedly thinking about recasting the site as an online cable operator, which would use the Web to send live TV channels and video-on-demand content to subscribers. "The new service," sources tell The Journal, "would mimic the bundles of channels now sold by cable and satellite operators."

As such, "Hulu may turn itself into a Web-based cable television service offering broadcast TV channel bundles the same way companies such as Comcast and Time Warner do," writes ComputerWorld. "This would allow consumers to subscribe to television and video-on-demand services via Hulu instead of a traditional cable provider."

For better or worse, Hulu has become one of the most-watched online video properties, and what The Journal considers "a top earner of web-video ad dollars" since it debuted in 2008.

"Top," however, is a relative term. Last year, Hulu generated $260 million in revenue, according to comScore. "For some context, analysts estimated YouTube would generate over $700 million for 2010," notes Business Insider. "Netflix generated $2.16 billion on the year."

Meanwhile, in the context of Comcast's recent acquisition of Hulu co-owner NBC, Engadget writes: "With cable subscriptions declining for the first time in years and online content viewership skyrocketing, it's obvious that some changes are afoot."

Read the whole story at The Wall Street Journal et al. »

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