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Hulu to Take Major Step Backward With Cord Cutting

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Internet video streaming services like Netflix and Hulu were once heralded for their forward-thinking, allowing consumers the option to migrate away from expensive cable, satellite, or fiber paid TV services in favor of cheaper monthly subscription costs. However, that may change as Hulu, which is owned by a Provident Equity and a consortium of TV networks including NBCUniversal, Fox’s News Corporation, and The Walt Disney Company, is looking at migrating to an authentication step that would require users to have a paid subscription to cable, satellite, or fiber services to use.

According to Hulu, the move will happen, but not soon, and may take a few years to pan out. It’s unclear how such a transition will affect Hulu, and its Hulu Plus service that allows users to watch recently aired TV shows on popular smartphone platforms like Android and iOS. When Netflix had announced a change in pricing scheme, separating its subscription into streaming-only and DVD-only categories, as well as an attempt to spin off its DVD-only business, the company was met with enraged users.

TechCrunch reported that Hulu had considered the authentication measure as early as 2009:

According to our source, Hulu and its content providers have talked about this move toward authentication since 2009. Our source noted that Hulu has no interest in being a first mover here and that a requirement for authentication is likely still a few years out. Hulu, however, does want to be a good partner and may have to give in to its partners’ pressure soon or later. Even though an authentication requirement isn’t likely to happen right away, though, our source notes that what could happen relatively soon is that the content providers could require longer delays before their shows become available on the service for non-subscribers. Cable subscribers, under this model, would get access to a show on Hulu the next day, while non-subscribers would have to wait at least 30 days. This model would likely also apply to Hulu Plus subscribers.

Hulu Plus is a monthly subscription service on smartphones and other platforms. The biggest downside with Hulu Plus, when compared to services like Hulu, is that despite requiring a paid monthly subscription charge from users, the service still embeds ads into each shows that user must watch before being allowed to continue to the next segment of the show.

At one point, Apple was rumored to be buying Hulu to deploy its much speculated iTV flatscreen HDTV.

Tech enthusiast in Silicon Valley enjoying the possibilities of ubiquitous connectivity, information sharing, and collaboration enabled by mobile broadband. You can contact Chuong on Twitter @chuongvision or search +chuongvision on Google+.

2 Comments

  1. Josh

    05/02/2012 at 8:56 am

    W O W!  Seriously, why don’t these companies get it?!  When you make things more difficult to get, when you price gouge your consumers, when you take away their options… the end result will be piracy.  Plain and simple.  Stop fighting forward movement and just adjust your methods.  

  2. TVDude

    05/23/2012 at 5:45 pm

    Fox is the example, what has this done for its shows? Glee, is down in viewers; House, was down in viewers to the point that it ended, Fringe is down in viewers and will end next year, New Girl started well and fell, you get the point. SO, how exactly has this new cable subscription service idea helped Fox? It hasn’t and if anything it has hurt it.

    Why on earth would more networks want to copy a failing idea? If they are pushing for this, they’re dumber than I thought. Hulu allows people to catch up on episodes they missed so what is the likelihood of someone watching a show that they’re behind on if they can’t catch up? I’m going to say very unlikely. Will this force them to get a cable subscription? Please, why would someone get a cable subscription for a network that is free? I suppose that it makes sense for USA and other networks, but ABC, Fox, NBC, CBS are free broadcast networks that DO NOT require a cable subscription. If anything, people will just buy DVR’s.

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