The Relevance of Hulu

As we reported yesterday, Hulu looks to be prepping a premium subscription plan (Hulu Plus) for its web viewers. This means, for probably $9.95 a month, you'll get access to far more shows than the viewer who opts to view for free. There are plenty of repercussions that result from such a decision, many of which affect us iPadders.

To begin with, Hulu is about to divide its audience. If you don't pay for cable or satellite TV, for instance, you may not be able to fit live TV into your busy schedule, as you probably don't have DVR service. Thanks to Hulu, though, you can catch up on a lot of your shows the very next day, watching them at your convenience. And in doing so, you pay nothing to Hulu, except hanging around for a few commercial interruptions. Because of this, if Hulu limits your free viewing to, say, only the five most recent episodes, you're not going to care; you stay current with your TV viewing.

However, if you want to catch up on a whole season that you missed, you're now going to have to cough up a subscription fee. The haves will be divided from the have-nots. We surmise that many of you don't want to pay yet another fee for TV, especially when Hulu has been offering it for free for so long. This divide could cause a lot of bad press and negative reviews from average television consumers.

The fact of the matter, though, is that it is only with the launch of the iPad that Hulu has decided to implement a pricing plan. Their official line is still, "Hulu is a free online service for consumers that generates revenue from advertising sales. Ad revenue comes from the ad impressions generated from Hulu.com, video streams from our distribution partners’ websites and from the embeddable Hulu video player."

The iPad, being hailed as the savior of multiple media formats, is once again being used as a means to monetize what previously cost the consumer nothing. But for this shift to be successful, companies must truly plus the content to make it worth the extra money. Beefing up a back catalog does not necessarily warrant a $120-a-year pricing leap. For instance, Tivo may offer a superior service to a Dish Network DVR, but it costs more, and the company is always having to work harder to gain new customers.

Many have been questioning whether Hulu is actually making enough money to stay afloat with it's current model, and it only offers TV shows from three networks (NBC, ABC and Fox). Peter Kafka of Silicon Valley Insider suggests that if more networks join in, Hulu's expenses will go up even more, meaning that their probable take of 30% of generated revenue would further decrease unless they upped their subscription fee even more.

Even Apple has been so-far unsuccessful at courting TV studios to participate in an a la carte subscription model, and this is the company that is single-handedly strong-arming the music and book corporations to fall in line with its plans.

So this forces us to ask the question: how relevant is Hulu? With ABC's free streaming video via it's official app, Netflix offering many whole seasons of popular TV shows for as little as $9/month, and the free YouTube app, does Hulu really still have the influence it once had? And by the time it launches on the iPad, will you still care? Share your thoughts.