Hulu, which claims an estimated audience of over two million paid subscribers, has become one of the most popular sites for streaming TV shows and movies. With a subscription to Hulu, the viewer has access to content from over 380 providers. With this, however, there is a downside: In one month alone, Hulu also streamed 1.67 billion video ads to consumers. Why is this a downside? For Hulu, these ads spell big-time revenue income. If the company has become such a profitable business, what could possibly go wrong?
In this case, the problem is not with Hulu itself, nor with the company’s performance, but with the company’s owners — which include Disney, News Corp. and Comcast’s NBCUniversal. So, while one would think that the owners would be pleased about Hulu’s success, it appears that they are actually more focused, as with the US government, on bickering with each other. However, within the Hula conglomeration, the problem faced by the owners is unusual in that it revolves around the way that television is changing. This is in large part due to the fact that, not since the advent of cable TV, has the industry faced the problem of how new technology — in this case, online streaming — might change consumers’ preferences, thus creating a question on how to proceed in the future.
With this in mind, and given the complex combination of owners, Hulu has found itself in the snags of corporate disagreement on how to move forward with its programming. This confusion went so far as to affect investors who were hoping that Hulu would be offered to the public, only to find that this option never gained traction because the owners did not want to lose control.
Next came a disagreement over an alleged sale of the company that apparently failed, once again keeping ownership unchanged. In another vein, the quandary continues because the owners who don’t want Hulu to fail also do not want Hulu to take away from their conventional television advertising revenues. To control many of these issues, the owners are seeking to control licensing of Hulu’s content, thus creating a climate in which some analysts proclaim that there is no amount of cash the owners would take that would allow Hulu to flourish under someone else’s ownership.
These conditions have made the atmosphere so volatile that it has turned into a virtual shootout between the various managements and owners, One area of specific concern to Hulu’s chief executive officer is the cost for a subscription to Hulu Plus, which he believes is too high. However, the owners, looking at their piggy banks, think the pricing is just right. This argument ignited a powder keg when Hulu’s CEO went so far as to post his feelings on his blog, where he is known to have proclaimed to the world that old media is dead. Of course, Hulu owners took exception to the rantings and the real battle began between owners and executives.
So here is the problem as I see it. The owners are in a pickle as to how to maintain their interests in old media and keep their investors happy, all while keeping Hulu in the black. However, I also see another problem. Though both Hulu and Netflix have substantial subscription bases, both are fairly small when one compares their audience to the audience tuning into traditional, broadcast television media.
I found that, after subscribing to Hulu Plus for approximately six months, I wasn’t watching enough to justify the monthly subscription fee. Therefore, even though I had no complaints about Hulu Plus’ streaming capability or its programming, I cancelled my subscription. Since that time, I have found plenty of entertainment and satisfaction in using my Amazon Prime, Netflix, and traditional television accounts. In the future, who knows? Hulu seems like it would be a great option for anyone using a home antenna instead of the standard cable or satellite systems.
What do you think? Can Hulu survive the television jungle?
Source: CNN Money
CC licensed Flickr photo above shared by biggraham