The war between cable TV and the Internet is about to heat up. Hulu, the popular online site for watching television shows, will start testing a $9.95-a-month subscription service as soon as May 24, according to a report in the Los Angeles Times. Hulu — owned by NBC, News Corp., and Disney — will continue providing free access to the five most recent episodes of Fox's Glee, ABC's Lost, NBC's Saturday Night Live, and other shows, but only subscribers will be able to watch older episodes. Is this the key to making Hulu a cash cow, or will viewers refuse to pay for Internet TV?
Free's great — but this is still a good deal: The thought of paying for Hulu "sounds awful" at first, says Jason J. Hughes in Cinemablend, but this is actually a smart way to start getting people used to paying for online TV. You still get "more than a month worth of programming on demand for absolutely nothing" if you don't want to pay, but $9.95 isn't a lot for all the extras you'll get as a subscriber.
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Big mistake, Hulu: "Unless Hulu is adding some real value for users, and not just putting currently free content behind a paywall, it's doomed to failure," says Carlo Longino in Tech Dirt. People won't pay; they'll just find "unauthorized downloads and streams" on a different site. "There's always somewhere else to go."
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Charging makes sense: The mix of free and premium — "freemium" — might work for everybody, says Cody Barbierri in VentureBeat. Viewers will still get a lot of free TV shows and movies, and Hulu's network backers will get the income growth they're demanding. With traffic leveling off, Hulu can't squeeze more money out of advertisers, so imposing a subscription fee is the logical way to go.
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People might pay, if Hulu sweetens the deal: Forking over $9.95 a month is "hard to justify," says Jacqui Cheng in Ars Technica, since ABC offers TV shows for free, and Netflix gives customers both streaming video and DVD rentals for one fee. But if Hulu can "sweeten the deal" with, say, mobile access through apps for iPad and other devices, users might pay for the added convenience of watching TV on the go.
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