Hulu Hoop

27 06 2010

I have gone on record many times as saying that, once a website starts to charge for content, its days are numbered. After all, I subscribe to Wired Magazine Editor Chris Anderson’s proposal that the future of the online experience is wrapped up in one word (and the title of his latest book): Free.

It’s a great idea, even if it is a little too idealistic at times. And so when “Hulu announced earlier this year that it was pondering adding a tiered service plan to its offering, I scowled. No way, I blogged, would people pony up another $10 a month for something, when we can already watch a slew of content for free at Hulu. Or elsewhere. Heck, we are already nickeled a dimed by so many vendors as it is: satellite radio (if you still have it), Vonage (again, if you still have it), photo storage sites (for those of us with thousands of pics). Why would I want to shell out another Hamilton just for the privilege?

But now I think otherwise.

Here’s the deal. Subscription Hulu has the distinct possibility of upending the cable and satellite TV industries, or at least giving them a serious run for their money. How much are you paying for TV each month? What if Hulu gave you practically the same, but for only $10?

And that is pretty much what Hulu intends to do. By partnering with virtually every network, they are not exactly disintermediating television, but they are sure lopping off a bunch of fat. With the ability of viewers to watch programing on computers, smartphones, and even Wii consoles, it cuts the bloated midsection off the coax-tethered mainstays. Imagine having a virtual library with thousands of TV shows from which to choose. It’s a time-shifter’s dream come true.

Of course, if this proves to be successful (and I now think it will), it invites even more tiered service packages. Hulu is lean and mean, and does not require miles of land line or an armada of orbiting satellites to make it happen. That translates into an enormous cost advantage. And in business parlance, that is a sustainable competitive advantage.

Of course, the real question is whether people will ditch their cable and satellite in favor of Hulu, or just add Hulu to their stack of monthly bills. To be honest, I bet Hulu doesn’t care. Just as long as you float them a ten spot every 30 days, they’ll be happy.

Dr “Cut The Cable” Gerlich



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