Media

Hulu About To Charge Customers

Hulu, the premium internet content service, is about to charge customers for access to certain TV shows and movies, perhaps the most important experiment ever to test whether consumers are willing to pay for full-length professionally produced video sent to…

By Douglas A. McIntyre
Published June 25, 2010, 5:17am ET · 2 min read

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Hulu, the premium internet content service, is about to charge customers for access to certain TV shows and movies, perhaps the most important experiment ever to test whether consumers are willing to pay for full-length professionally produced video sent to their PCs. Data from comScore showed that in May, Hulu delivered 1.1 billion streams, second only to YouTube which delivered 14.6 billion. The average number of videos viewed on Hulu by viewers was 22, also second to YouTube which had 101. YouTube videos are often produced by amateurs, so the comparison is not entirely useful.Hulu is also about to sign a deal with Sony (NYSE: SNE) to stream content to the PS3.

“The popular video site is working to finalize agreements with content owners and hoping to wrap them up in the coming days”, according to The Wall Street Journal.  Hulu currently relies on paid advertising to support its business. The new Hulu Plus service will charge customers about $10 a month.

The odds against Hulu are high. It was late into the VOD market. Cable companies and satellite TV services dominate it, and telecom firms such as Verizon (NYSE: VZ) and AT&T (NYSE: T) are aggressively marketing fiber-to-the-home which includes TV service, broadband, and telephone service.

Another enemy to Hulu’s model is the current move by smartphone companies to stream premium content over 3G wireless networks to cellphones. The advent of 4G should make that model even more powerful as will the new better resolution screens.

The greatest threat to Hulu is probably the ongoing “success” of pirated content. File sharing is rarely talked about anymore, but it is damaging video entertainment as badly as music sharing did to the record companies.

Hulu simply has too many fences to clear. The service has little chance of being a success.

Douglas A. McIntyre

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Douglas A. McIntyre

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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