Hulu is plagued by its own success. CC by ilya/Flickr
Free Internet video content paid for with advertising may not work for Hulu. Offering Hulu content at no charge to what could be paying customers is tempting the company’s executives. As more viewers migrate to the Internet from cable, Hulu is considering becoming the cable TV of the Internet in a quest to charge TV watchers as much as the market will bear.
Competition is something Hulu prepares for
In 2008, a new Internet video content provider was started. Hulu has since been very successful. Hulu is partnered with NBC Universal, Rupert Murdoch’s News Corp. and Walt Disney Co., which owns ABC. Hulu is a legal alternative to YouTube pirated videos. Many owners of Hulu are worried that traditional media properties will start to do poorly because more viewers are starting to watch internet videos instead of cable. About $2.16 billion in 2010 revenues went to Netflix while it had 20 million subscribers, the company announced on Jan. 25 . Hulu, which sells advertising around its programming, netted $260 million.
Internal dissent threatens Hulu IPO
Hulu content providers started complaining that streaming content cut into cable advertising revenues as early as 2008. Companies that compete with Hulu such as Apple, Microsoft and Netflix may start getting content from News Corp. and Disney because they are planning on pulling content from Hulu. The Hulu IPO that might happen could net up to $2 billion, but, which Hulu executives are concerned that it won’t happen if News Corp. and Disney pull their content. Hulu needs to make sure there will be long term access programming if it wants to have a successful IPO.
Lasted long enough
Hulu’s licenses to News Corp. and Disney content expire this summer. To complicate matters, NBC Universal must give up its stake in Hulu because of anti-trust rules involved with Comcast’s acquisition of the company. The recent episodes of “Saturday Night Live” were immediately given to Netflix instead of NBC after the NBC Universal change happened. Amid the tumult, Hulu is exploring the possibility of becoming a web-based Comcast, with inflated charges and pay per view bundled with channels subscribers will never watch. Hulu might not be able to get a web-based TV to last long since the major corporations are swallowing the Internet.
