Hulu.com Changes Could Boost CE Sales
Hulu.com confirmed it would offer consumers paid access to an expanded offering of online content in addition to the free content it already provides. The new service, called Hulu Plus, will offer more than 120 seasons and 2,000 episodes of at least 33 TV shows from Fox, NBC, ABC and other networks for $9.99 monthly. Significantly, Hulu Plus allows consumers to watch Hulu.com’s content on their wireless devices such as Apple’s iPhone, iPad and iPod Touch.
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This could further stimulate the already strong sales of consumer devices as more people begin to watch TV content online, said analysts. Initial testing of the service has performed well over Wi-Fi networks, but some consumers experienced buffering issues over AT&T’s 3G network, said BTIG Research. Hulu.com said that soon consumers can access Hulu Plus using their Playstation 3 device, while the Xbox 360 won’t be compatible until “early 2011.” A Sony Computer Entertainment America spokeswoman on Wednesday confirmed the service will be “coming soon” to the PS3, but didn’t elaborate, saying “we will be providing more information about Hulu Plus and PS3 in the very near future.” Microsoft didn’t immediately comment. Internet-ready televisions like those manufactured by Samsung and Vizio will also provide access to Hulu Plus content via the Samsung applications store in addition to some select Blu-ray DVD players.
The new service is still in its beta phase and analysts say it is too soon to tell what effect it will have on mobile TV content providers such as Netflix. As for the threat Hulu Plus poses to the cable and satellite companies, industry advocates said the service may only have a minimal impact on their broadcast and VOD services. Only 5 percent of consumers said they would be willing to pay $9.95 per month to watch TV shows online from a service like Hulu.com, according to a recent report compiled by the Leichtman Research Group. Industry advocates point to the fact that Hulu Plus does not currently provide local news, live sports or public TV programming, something which distinguishes “over the top” content providers from traditional television broadcasting.
However, Hulu Plus might be the next step for consumers who prefer to watch TV content without paying for cable, said some experts. “It’s not a cable killer but … people might start to think of it as a substitute for cable,” said communications lawyer Howard Liberman of Drinker Biddle. This could prove to be particularly true among younger consumers who have increasingly embraced online content providers, analysts said. “More and more young people are tightening their belts and using their tech savvy to entertain themselves using online video,” said Jimmy Schaeffler, chairman of The Carmel Group.
Concern over security and piracy issues remained an issue for some who questioned whether Hulu.com has the capacity to enforce the illegal proliferation of paid content. “Security is a major issue,” said Steve Effros, a cable consultant at Effros Communications. “Once you take all this programming and put it out on a person-to-person basis, the business plan will fail,” he said. “This is valuable programming that is offered on DVDs and OnDemand services. It has value and [Hulu] has to protect it.”