Who knew that Hulu would have turned out to be so successful? The backers for the endeavor sure didn't. Their original goal was to use Hulu as a bartering tool with companies like Apple or Google but with growing success and a changing industry it looks like competition might be forcing Hulu to change it's ways. It seems that they are not exactly sure how this is going to work but the joint venture between News Corp.'s (NWS) Fox, GE's (GE) NBC Universal and Disney's (DIS) ABC will in the future be offering a premium content package that will go beyond the normal free content that Hulu users are used to seeing. The site is already close to breaking even just off of add revenues but charging for content is a delicate thing so they need to be very careful not to upset their current users since less traffic to the site would hurt ad revenues and possible premium subscriptions. As of right now we can only speculate to how things will actually pan out.
Comcast and Time Warner have a similar idea with a service called "TV Everywhere." It's a premium service where the customer would be able to watch all the available channels under their current subscription over a broadband internet connection. So you would get your programming on more screens for free right? Right now it seems that way but if TV Everywhere catches on price increases can be expected in other areas in the future. TV Everywhere isn't all gravy to some. The "user-authenticated" model it uses is a threat to sites like Hulu and a possible barrier for competition in the marketplace. Critics had this to say about TV Everywhere.
Only the TV Everywhere model promises to port yesterday's lucrative business model onto today's platforms. And that, according to some critics, is exactly the problem.
(TV Everywhere) raises substantial anti-competitive issues by restricting the availability of programming to the favored distribution methods," said Gigi B. Sohn, president and co-founder of the public interest group Public Knowledge. "Under the TV Everywhere plan, no other program distributors would be able to emerge, and no consumers will be able to 'cut the cord' because they find what they want online. As a result, consumers will be the losers.
In addition, we are concerned that this program violates the open nature of the internet. By adding this additional toll lane, Comcast and Time Warner want to create their own 'managed channel' within the internet and turn the internet into their own private cable channel.
Which model to you prefer? Does a user authenticated model violate net neutrality? Tell us what you think.