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Paid Hulu Coming, But When?



huluI’m elated that all my favorite TV shows have come back for the fall 09 season.  I’m a very easily entertained person and love a wide range of shows.  My personal favorite is CSI (notice I didn’t include Miami or NY since those are a joke now).  It is tough to decide what to watch every night, especially on Thursdays.  While CSI is on, I also enjoy NBC’s primetime line up featuring their new show Community, Parks and Recreation, and The Office.  Throw into the mix ABC’s new show Flashforward and it’s three different channels at one time.  Thankfully, the channels post most of their episodes online so viewers can watch at a later date.

To be honest, if one doesn’t watch much cable programming, you could just disconnect it entirely and watch shows on Hulu.  This would save a bunch of money over the year, but recently Hulu has experimented with paying to watch shows.  While this is in early testing phase, there has been considerable backlash already.  The television business brings in $22 billion a year in cable and satellite TV subscriptions which is then paid to programmers.

Soleil Securities media analyst Laura Martin calculated “that for every viewer who migrates to the Internet, the companies forfeit $920 a year in ad revenue. The long-term risk is that people would eventually cancel their cable or satellite TV subscriptions.”  Hulu’s online audience swelled to 38.5 million viewers in August, up from 10.2 million a year earlier, according to ComScore Video Metrix, which tracks online audiences.  When you combine those numbers they are staggering.  There will come a point where executives will put a halt to free online viewing and wasting precious ad revenue away.  This will especially take flight IF Comcast does end up buying out NBC Universal, something that is in early negotiations.  Comcast execs have made their feelings known about Hulu and be assured, if they do have 51% controlling power of the company, viewers better be ready to pony up to watch episodes.

The question is how much would one be willing to pay?  Would they pay by show or by the amount watched?  I would think some shows would be in higher demand than others, like Lost or The Office.  They could say that an episode of The Office is $2 per show.  That means that an entire season would probably cost about $30-40.  Going a step further, would one wait until it comes out on DVD to purchase for the same price with the luxury of watching it over and over again?  If a particular viewer has ten shows they subscribe to on Hulu, that’s $300-400 per year.  Although that might seem a lot, that would still probably be lower than any normal cable bill.

If Hulu does in fact end up charging for premium content, it wouldn’t be anything new.  People buy episodes of shows off iTunes all the time and they are fine paying $1.99 per episode.  Viewers are just spoiled by the fact that episodes are free on Hulu, we just have to endure some 30-second commercials.

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