According to the New York Post, Hulu could enact a policy that requires its customers to have a cable or satellite subscription. This shift of business model would dramatically change the dynamics of the company, and would risk losing most of its 31 million users that are currently unsubscribed to cable TV.
Although the recent news is all rumor, this shows the changes of media consumption. It’s also not clear if this subscription requirement – assuming it is actually going to happen – will just apply to Hulu’s free service, or if it will also apply to Hulu Plus subscribers. Hulu Plus, which costs $7.99 per month, currently has somewhere between 1.5 and 2 million paying subscribers.
The potential result will be more people turning to piracy, until at last the companies face the fact that they need to change the way they do business. You would like to think that companies would have learned from the music industry. Since the entertainment companies faces “shifts in home viewing habits,” there has been a “continuing collapse” of video rentals, leading to the subscription requirement. The Hulu viewership could be lost, but the authentication process could take years to become official so customers should not fret over this completely.
The possible move to a cable subscription to view Hulu content is both surprising and not surprising. Hulu’s concept is too much of a good thing, and some executives might have conjured the idea that they could seriously make more profit than they expected by changing the business model. That’s the least surprising aspect. The most surprising element is that why would Hulu put themselves at risk to go out of business if they could lose most of its customers. If the authentication happens, and over the course of time the new approach fails, what is their next (or last) resort? This is certainly intriguing enough to keep a close eye on.