Can Hulu Bank?
Can it cash in on it's popularity, that is? A seemingly simple question with potentially broad consequences for media as we know it. For those unfamiliar with Hulu, it is a joint venture of NBC and FOX, with ABC and Providence Equity Partners also holding significant stakes in the project. With a delay of about a week, you can watch a bunch of network and some cable shows for free online, with high quality video and little commercial interruption.
The three year old company claims $100 million in revenues for last year and is contemplating an IPO. Hulu is in talks with multiple investment banks about going public later in the year with an anticipated valuation in the $2 billion range.
With U.S. IPOs climbing to their highest levels since 2007, last quarter, this is not exactly shocking news. What sets Hulu apart is the social (almost religious) significance we Americans place on our TVs. Everybody I know absolutely loves Hulu. It's free. Picture's great. You can surf while the little commercials play. Easy and fun.
Will it be so once it converts to a full-time pay service? What began as an ad-support service for watching recently broadcast TV shows for free online is changing in an attempt to monetize. In June, the company announced the Hulu Plus paid service that offers current and archived TV shows on computers, cell phones, Apple Inc.’s iPad and TV sets for $9.99 a month.
As Edmundo correctly pointed out in relation to Skype and Demand Media IPOs:
The one thing I find most interesting about both companies is what they represent going forward, which is the death of old business models.
The question with Hulu, however, is will Americans cut the umbilical chord with their TV sets? The television, more than any other appliance in our homes, has become such an embedded part of our daily existence that it is questionable what sort of legs Hulu stands on once it has to directly compete with the Idiot Box.
The cinematic allure of television's big screen and group gathering grounds function, simply cannot be imitated by a computer screen.
Hulu's biggest issue, however, is an untested business model. There isn't sufficient evidence that the website can and will generate profits going forward. There also seems to be a built-in potential for cannibalization due to the ownership structure.
Hulu is currently in talks with CBS and Viacom about adding their shows to the service. Hulu's audience took a negative hit when Viacom pulled "The Daily Show with John Stewart" and "The Colbert Report" from Hulu's listings.
With the high level of regulation associated with the broadcast industry and billions of dollars at stake, this will be an interesting litmus test of whether online TV can go mainstream.
Interesting thoughts to consider certainly. However, hulu plus doesn't mean we'll stop gathering around the tv. They're bringing the service to game consoles, blu-ray players and internet connected tvs, so that we can stream content directly to the big screen. In effect, it may replace cable / antennas in households more than it'll replace the tv.
I personally think Hulu is showing the world what is to come, but it will not be the company to do it. Most of Hulu's content can be found online for free and they are also competing with Netflix for on demand entertainment. Cable companies are getting into the mix with their own services.
I used to pay (very recently) 80-90 a month for cable and internet. I got a ton of channels, on demand and fast cable internet. If you go the Hulu route you are only getting rid of your cable TV while still paying for the Hulu service and cable internet. In return for the maybe 20-30 you save per month you still sit through commercials and have limited channels. Tivo and on demand make cable better IMO.
Another thing that is not being talked about is the pay per use that broad band is moving towards. Most cable companies are testing out caps and tiered services. Once this gets implemented (I am 100% confident it will) you will see much of the savings Hulu provides evaporate. Hulu really does piggy back off cable companies and unlimited internet. Once you have to pay for as much as you use I think you will see consumers balk at the current Hulu model.
disregard hulu, aquire usenet. You can get any show delivered fast. If you have to poay for something it might as well be for better service, which usenet offers. also,if you have a laptop with hdmiout you cann easily watch stuff on your tv.
Nostrum quod qui ipsa minus autem. Nisi et minima vitae a quasi qui.
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