The Wall Street Journal has a fascinating (and lengthy) take on Hulu’s story arc.
The free online television service has become one of the most-watched online video properties in the U.S. and a top earner of web-video ad dollars since its 2008 launch. But its owners—industry powerhouses NBC Universal, News Corp. and Walt Disney Co.—are increasingly at odds over Hulu’s business model.
And that’s the crux of the matter. We’re clearly in the midst of a dramatic industry transformation, in how (and where) we consume video entertainment. Yet there’s no universally agreed upon or clear path forward. Hulu’s internal and external struggles, partially illustrated by an unpredictable catalog of content and two unclear tiers of service, are surely representative.
Given the licensing challenges and competitive landscape, Hulu’s considering switching gears to become a “virtual cable operator.” As such, Hulufinity would provide live “television” across the web. However, if they thought licensing back catalog content was difficult, they ain’t seen nothing yet. The networks will continue to protect their local affiliates and know where their bread is buttered… and, despite the winds of change, it’s currently via the cable and satellite providers. Not to mention, I’m sure those very same cable providers have been researching similar offerings of their own. And they’re certainly better positioned to capitalize.