How Hulu Lost Its Place In a Netflix World [Streaming]

Hulu is a fantastic service. Who could argue with free, current episodes of primetime TV to your computer? But for months now, Netflix has been eating Hulu’s lunch. And Hulu’s plan to fight back sounds more like a swan song.

According to the WSJ , Hulu’s role one day will not be as an archive of network television at all. Instead, faced with splintering commitment from its partners and intense competition from Netflix, Hulu may upend its business model entirely. In place of a warehouse of episodic content, Hulu could become an entire-fledged online cable operator. That suggests concert events and video on demand, all accessed through Hulu.

It wasn’t purported to be like this. Hulu launched with strong network owners in NBC and News Corp , even picking up media powerhouse Disney along the way in which. But with concerns that the free model takes too big of a bite out of their TV profits, those same networks are now seeking to pull content from Hulu while jointly licensing it to Netflix, Apple, and others. It’s hard to grow up a winner when your parents don’t feed you.

Netflix, meanwhile, continues to roll. While it doesn’t have the depth of TV offerings that Hulu does, its movie selection is unparalleled and its TV selection is expanding rapidly (thanks, again, to Hulu’s owners). The service has 20 million subscribers . And studios, despite some hemming and hawing, would ultimately rather make a lucrative-reportedly up to $100,000 per mid-season episode -handle Netflix than rely upon middling ad revenue on Hulu.

That’s just the current state of things. With licensing negotiations looming, some networks are questioning whether they ought to be giving Hulu exclusive content at all. Some are even mulling the potential for making Hulu wait two weeks for brand new content.

So Hulu’s in trouble. But is becoming a live television portal online really the answer? In fact not. Whatever allure watching television live had-apart from sports and likely ” event programs” -died out with the arrival of DVR. It’s also hard to peer how video on demand could be a compelling offering to a generation weaned on iTunes, Amazon On Demand, and their cable providers.

Companies and products usually evolve to fulfill the demands of their users. Hulu, though, is like a bonzai tree that the networks keep trimming until there’s nothing left but stump. What started with a view to keep YouTube from yanking all that ad revenue has outlived its purpose for the folks writing the checks. And turning it into another cable provider may be the best technique to kill it off entirely. [ WSJ ]

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This post is tagged: intense competition, media powerhouse, million subscribers, network television, television portal, watching television