A Look at Hulu
About the Company
Unlike other online video sites like YouTube, Hulu seemed to start with the intent of serving as a cable TV alternative. An content aggregator born as a response to online piracy and the revenue opportunities of online TV. The service, which launched to the public in 2008, is a joint venture between a number of companies and distribution partners including AOL, MSN, Facebook, Yahoo, NBC, FOX, Disney and others, to stream ad-supported episodes of popular TV shows and some movies.
Hulu offers recent episodes from a large variety of popular TV shows to all registered and unregistered users. In the summer of 2010 Hulu Plus was launched. Hulu Plus is a subscription service that works in the same way as the free version but also adds the ability to watch a full season’s worth of shows, instead of just the most recent handful of episodes. Hulu Plus is available online, as well as through certain media devices, like the Playstation 3, the Xbox 360, some models of Vizio, Sony and Samsung TVs, and more.
According to Hulu financial reports, the company topped $100 million in revenue in the summer of 2010 and was second to YouTube in monthly video streams.
About the Service
Hulu is only available in the U.S. due to licensing reasons on their content. While there is a huge breadth of content on the site, and it might be one of the most compelling substitutes to Cable TV, it still pales in comparison to the number of programs offered through cable or satellite TV. The small episode limit for free users is also a barrier; those that don’t visit the site often or pay for Hulu Plus could miss episodes of shows they want to watch.
Another problem the service is facing is the move to TV. While competitor Netflix has devoted a large amount of resources to getting the service on a large variety of devices, Hulu seems to have done the opposite—restricting use of Hulu to computers and select devices. According to the Wall Street Journal, Hulu’s top three owners—NBC Universal, News Corp. and Disney—are in disagreement of what direction to take the service in. Some have voiced concern that free Internet versions of their biggest TV shows are eating into their traditional cable TV business. In the spring of 2010 Viacom pulled two popular shows from Hulu—The Daily Show and The Colbert Report—because it felt that the current model wasn’t worth continuing with. They opted instead to stream the shows on their own respective websites.
The Wall Street Journal has reported on rumors that Hulu may become a full fledged online TV cable operator that would send live TV through an Internet connection, offering traditional cable features like channels and on demand movies. Where the service goes next is still unclear.