Hulu Looking for a Piece of the Cable TV action

Hulu, the number two video streaming site on the web, announced its intention to start a pay service as early as next month. Currently, the content found on Hulu is available for free with limited commercial interruptions. The owners of the online video site, a combination of News Corp., NBC, and Disney, want to see more revenue generated, even though the relatively young (2 yrs. old) site has made more than $100 million in advertising dollars.

Under the new pay service, the 5 latest episodes of popular shows would still be available for free, for a limited amount of time. If you wanted to see other episodes, it would require paying a $9.95 monthly fee. This move is not surprising considering that the major networks are going after more money from cable TV companies. There is just no way to justify free online content when television providers are obliged to pay for basically the same content and quality.

Users should also expect to see more commercials, especially during viewings of free content. Hulu currently shows a lesser number of commercials than regular pay/network TV. In keeping with network and pay TV practice and to create more revenue, Hulu will need to add to the number of commercials that viewers are watching during each show. It is not known at this time if the pay service will be commercial free or not.

The big concern for television production companies at this time is the fear of going the way of the music industry, where free online content led to a huge drop in sales. It is thought that this is more of a move to make sure that everyone pays, than just another way to get money. Cable companies like Time Warner Cable aren't sitting by idly. With new web and digital products, as well as special deals that push TV, Internet, and digital phone bundles, cable companies are hoping to keep people in front of their TV screens instead of the computer monitor. The burning question here is how long before online content cuts into cable TV's bottom line.