San Francisco: Free video website Hulu plans to soon begin charging customers and is looking to expand its content to consumer devices like the Xbox and iPad, according to two sources, as the site's media owners experiment with platforms beyond an ad-supported TV model.
Those sources and another with knowledge of the matter said that Hulu, the website for TV viewing owned by News Corp, General Electric's NBC Universal and Walt Disney, was developing a subscription service to be rolled out on multiple devices in the next month or two. It was not clear if that service would be offered before Hulu is available on devices.
One of those devices is expected to be Microsoft's Xbox, which also features Netflix's movie streaming service, one of the sources said on Tuesday. Another one of the sources said Hulu was also working to offer its service on Apple's iPad.
Hulu, which generated an estimated $100 million (Dh367 million) in advertising revenue last year, will continue to offer newer episodes of shows like Fox's Glee free of charge, but it will also charge viewers a monthly fee to see older episodes and other content, two of the sources said.
Hulu and Microsoft declined to comment.
Entertainment and cable industry executives will be closely watching Hulu's attempt at a paid model.
Competition
Competition is intense, with entertainment companies and content distributors scrambling to become top dog in a worldwide online video market expected to hit $16.1 billion through paid and ad-supported services by 2012, according to ABI Research, which tracks media trends.
Since its launch in 2008, Hulu has emerged as one of the star players in online video, offering TV shows like The Office as well as full length movies. Advertising has kept it stay free.
Hulu is hardly an exception. Across the internet, nearly all movies, TV shows, and video clips can be seen for free if the consumer is willing to tolerate advertisements. But that could change quickly if a Hulu paid service succeeds, since other entertainment companies are likely to accelerate their own efforts to create subscription models.
Risks
Hulu's plan is not without risks.
"Many consumers already pay $100 or more monthly for TV, telephony and high-speed internet access and are unlikely to welcome an incremental fee merely to watch from the internet some of the programmes they already get," said Phil Leigh, an analyst with Inside Digital Media.
But Mike Vorhaus of media consultancy Frank N. Magid, believes that consumers will pay for the convenience of getting content when they want it, where they want it.
Netflix's Chief Executive Reed Hastings said on a recent conference call: "There's the potential emergence of direct competitors [like] Hulu. We'll see what they do, and potentially others over time ... but the upside is it's a very big market."
