Announced June 29th, Hulu Plus is now available on an invitation only basis. Although free content is still available, subscribers to Hulu Plus pay a monthly fee of $9.99. Even with the paid subscription model, there will still be some ads, with the first advertisements coming from Bud Light and Nissan.
Customers are getting quite a bit for their $9.99 a month. NBC Universal, News Corp., and Walt Disney Co. are providing the initial content for the service by providing full access to 45 current programs as well as full seasons of past programs such as “Arrested Development.” Also, most of that programming will be shown in 720p HD. Furthermore, customers will get access to programming on their TV, iPhone, iPad, and more.What does this all mean for Hulu? Primarily, it allows Hulu to be able to gain access to better viewing windows from content providers. Windows are the time frames for which Content Providers license their content. Because more people watch television and that generates more income, Content Providers generally sell the first window to Cable Providers. By generating more revenue, Hulu will be able to pay more for content, and this will allow Hulu to negotiate for earlier windows. In the future, this will probably allow Hulu to skip the traditional first window of television. Unless Cable Providers want to end up like Blockbuster Movies, they need to find a way to compete with Hulu Plus’ ability to give customers the content they want, wherever that costumer happens to be.
Second, Hulu is helping to push the envelope on the TV Everywhere movement. By providing “More wherever. More whenever. Than ever,” Hulu is in a great place to gain a larger market share than before. Customers constantly want more. By streaming online content to their mobile devices, a customer gets more and is no longer restrained to their television set. They are free to watch when they want, where they want. This freedom to view content anywhere provides Hulu with a unique opportunity to get more data about viewing habits than the traditional cable model.
Along with this freedom for the customer and information for the provider comes the threat of costumer backlash and piracy. Customers do not necessarily want big brother knowing their every move, and Content Providers do not want their content stolen before it can get to the screens. Hulu’s next couple of years will provide a lot of answers for the questions the TV Everywhere model poses. Hulu has poised itself to overtake a lot of great models, such as Netflix and YouTube, if it manages customer expectations properly. Right now, only time can tell if this is the right model. If it is, the possibility of bridging the gap into other types of content is not only existent but also highly probable.