While Hulu offers a "Plus" subscription service granting users access to its entire list of TV and movie programming for desktop and mobile devices, it also provides a free-but-limited streaming service to the desktop only. Now there's a rumor that Hulu may alter the latter free service so that users must prove they’re currently subscribers to a local cable TV plan provided by Comcast, Time Warner and others in order to stream TV content.
According to the New York Post, the 31 million users of the free Hulu service may eventually be required to log in with their cable or satellite TV account number. Inside sources claim this is a result of Providence Equity Partners' move last week to cash out of Hulu after five years. They also indicated that it's nothing personal -- Comcast is even reportedly moving to an authentication structure with TV Everywhere and this summer's Olympic Games.
Hulu, which is owned by Comcast, Disney, News Corp and Providence, is expected to see a drop in traffic if the authentication model is set in place. But it could be years before such a measure is implemented. Of course, Hulu's fate will be determined on how the streaming wars will be carried out as cable operators move online and dish up their own streaming services -- Hulu may not even be around in a few years if competition gets too intense.
The big fear for cable companies is that users are trying to "cut the cord," watching their favorite content online instead of using a cable box. On the contrary, consumers merely want multiple platforms, to not be tied down in front of the living room TV. As Hulu and Netflix have demonstrated, viewers enjoy movies and TV shows on their desktops and mobile devices no matter where they are. Instead of handcuffing customers, these companies should embrace the change.
But what's at fault here is Hollywood and its dictating ways. Piracy would likely be at a bare minimum if content could be displayed when and where the consumer desires. But instead, content owners enforce restrictions, thus cable operators must do the same. People seemingly are willing to pay for streaming to their tablet or smartphone while also watching the same content on their big living room HDTV. Amazon, Apple and now Walmart are even proof that consumers are willing to invest in content that's stored in the cloud.
According to the Digital Entertainment Group, overall spending on home entertainment jumped 2.5-percent to $4.45 billion in the first quarter as streaming helped offset the continuing collapse in video rentals. Hulu itself took in around $420 million in ad revenue in 2011, and expects to do extremely well this year.