Hulu May Begin Charging for Content

Jon Miller, the former AOL boss, recently took over digital initiatives at News Corp. Only weeks into the job, and Miller is already making waves in the industry with his visions of a future where Hulu could charge for at least some of the TV shows and movies on its site.

News Corp. owns a sizable portion of Hulu, so when someone like Miller says it’s possible Hulu could begin charging for content, there’s a good chance that statement could come true. In addition, Miller is in charge of coordinating News Corp.’s efforts to find new ways to convince users to pay for digital content generated by News Corp.’s properties, so Miller definitely has some pull here.

However, there’s still hope for those of us who want free content: Miller notes his statements are his own opinion and not necessarily the Board's decree. In fact, Miller won’t attend his first board meeting until Monday. Still, over time, Miller’s visions could become reality.

News Corp. is familiar with subscription revenue models on the Web. While many papers and online news sources today are ad-supported, News Corp.'s Wall Street Journal continues to enjoy success even though much of its content is only available to paid subscribers.

Hulu’s current business model is well liked by users because they can watch high-quality content on demand with only a single advertisement per commercial break. Compared to traditional TV advertising, Hulu’s total revenues are miniscule, however. To help make up for suffering ad revenues, one obvious approach is to charge users. It’s a delicate balance, however, since charging for content could deter new users from trying the service.

For now, Miller’s interests seem to be around finding creative ways to bundle News Corp. content with other offerings in hopes of creating a package that people are willing to pay for. "I think what works for consumers most likely—and this has to be tested, frankly—is bundles," he said. "I think you have to figure out what are the right bundles that people buy and what's contained in that bundle. For example, you could have—and I'm making this up entirely—you could have a New York bundle, and that could consist of various papers or publications that are relevant to the audience in New York, and you could make that all, potentially, a bundle to a consumer at one price." Miller added that such a bundle might include a device to read it on, such as a Kindle or an iPhone, as well as the content itself.