Originally Posted by Charles R
In the relative future Hulu has much more potential for revenues (and profits) than Hulu Plus. Close to $200 million this year and they are even profitable… imagine that for an Internet based company! So I don't see that service going away anytime soon (if Hulu has anything to say about it).
Regarding Hulu Plus their content fees will rise dramatically as the content will have to be more valuable to obtain paying subscribers. Also they will have to fight Netflix for the same content which will drive the cost up even higher. Now I'm guessing an ad viewed on your TV is worth more than one viewed on your PC so perhaps revenues can offset a great deal of the added expense.
The threat to Hulu is if they divorce themselves from the studios the studios no longer have a vested interest in seeing Hulu do well. So perhaps the sweet heart content deals disappear unless Hulu remains big enough to throw their weight around. The studios will still want to market
their content and if Hulu is the elephant they will be fine.
Overall I think at some point Netflix and Hulu has to go at each other. That is if online delivery is going to become mainstream and approach the other delivery services.
Let me clarify my point.
Hulu does not want the free version
(PC) on our TVs because they'd rather you watch the actual broadcasts of current shows. This is due to broadcasts generating more ad revenue than what the PC commercials bring in.
For the people that do not like watching TV on a computer, and would like to see Hulu on set top boxes, etc. - that's what Hulu Plus is for. They do
want that version on our televisions (or at least they are currently experimenting with it to see if the business model is feasible). In order to offset the lower ad revenue, they charge a subscription fee since viewership is in lieu of the traditional broadcasts.
I'm not sure what you mean by 'divorce the studios' ... Hulu is
the studios. Only 10% is not owned by broadcasters/studios. Or am I misunderstanding you?
NBC Universal (32%)
Fox Entertainment Group (31%)
ABC / Disney (27%)
Providence Equity Partners (10%)