Why Hulu may not always be free

Sally Herships May 2, 2012

Jeremy Hobson: Executives from the online TV site Hulu are in New York today — along with their counterparts from Yahoo, YouTube and AOL — selling their content to advertisers. The event is called the digital upfronts — an alternative to the traditional TV upfronts.

But as Sally Herships reports from New York, a site like Hulu is no longer the alternative to cable it once was.

Sally Herships: Did you cancel your cable subscription because you can watch Hulu for free? Too bad. You may have to start paying for cable TV again.

Todd Spangler: Fox is already doing this.

Todd Spangler is technology editor for Multichannel news.

Spangler: The episode of “House” that aired on Monday, you can’t get it, free on Hulu, until the 8th of May.

But subscribers to Dish satellite TV don’t have to wait, and they can watch shows on Hulu for free. Spangler says TV companies need to keep viewers paying. Otherwise, cable companies might tell them:

Spangler: Hey, you’re throwing all your stuff out there for free. Why should I pay you anything?

Sam Craig is a media expert at NYU’s Stern School of Business. He says content providers have two options. Increasing prices or selling more ads.

Sam Craig: If you sell more ad time you increase the clutter, it becomes less desirable as a watching experience place for consumers. So you’re ultimately between a rock and a hard place.

Which is why content on Hulu may not always be free.

I’m Sally Herships for Marketplace.

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