Hulu Could Strike Blow to Cord Cutting
(April 30, 2012)
-- Hulu.com, which allows consumers to watch current season TV
shows for free, is often cited as a reason why some pay TV
subscribers drop their cable or satellite service. But a New
York Post report says Hulu plans to soon require users to prove
they subscribe to a pay TV service before viewing.
The newspaper writes that Hulu's new business model would
include "authentication" -- subscribers would have to log in
with their cable or satellite account numbers. The change would
unquestionably drop Hulu's user totals (it had 31 million unique
users in March, says the Post).
But it could generate significant revenue from pay TV services
who would likely pay Hulu to require a cable or satellite
subscription. (Hulu is owned jointly by NBC, News Corp. and
The new business concept would irk longtime Hulu users -- and
perhaps even some longtime Hulu financial supporters. Providence
Equity Partners decided to drop its funding of Hulu last week
after learning of the new plan, the Post reports.
The newspaper writes that Hulu collected $420 million in
advertising last year. But the switch to authentication would
dramatically lower those numbers. (Hulu also collects monthly
sub fees from its Hulu Plus service; it's unclear if the
authentication feature would apply to Hulu Plus as well. The
timing of the Hulu authentication plan is also unclear.)
The authentication feature is used by several pay TV operators
for their 'TV Everywhere' service. For instance, DIRECTV allows
subscribers to watch live shows and movies on mobile devices,
but they first have to punch in their DIRECTV account numbers.