As of last month, Hulu had 9m paid subscribers to their Hulu Plus program. As of last week, Hulu CEO Mike Hopkins announced that they’d be killing the Hulu Plus program.
To be more specific, he said that there was no need for two brands, and that Hulu was going to drop the “Plus,” which could really mean just about anything.
But Hopkins is right about the confusion. Even when I was a subscriber, Hulu Plus didn’t make much sense. You signed up, gave them your credit card information, scored an account, and the commercials were still there. Shame on all of us who assumed that paying eight bucks a month would let us avoid watching the same heartburn medication commercials five times per Daily Show episode, I guess.
What you really got with Hulu Plus was access to a backlog of episodes, early access to recently-aired episodes, the ability to watch episodes on mobile devices and the right to bitch about still seeing commercials.
Contrast that with the simplicity of Netflix, where you were either paying for access or you weren’t. It always felt a bit like Hulu was using popular TV shows as advertisements and enticements for their subscription program, so Hulu Plus became the have-it-both-ways distillation of a pre-DVR TV revenue model that the internet had already scoffed at.
Every subscriber made Hulu money twice: the flat fee and loaded commercials. Certainly that violated some kind of tacit, internet age understanding between the content provider and the advertising-despising costumer. In fact, back when I was selling ads for a bi-monthly magazine, the rule of the thumb for any publication was that you could either make money by focusing on ad sales or subscriptions, but not both. The bottom line then and now is that few people want to pay to get a giant packet of advertisements every month with an article or two hiding in the middle, and few advertising brands want to disappear into a fog of advertisements.
I imagine a lot of the program’s success came from inertia, like Columbia House Records Subscriptions (I held onto both of those things too long; don’t judge). Or maybe people really did find $100’s worth of value in being able to ignore an entire season of New Girl until binge-watch weekend.
At the same time, Hulu being free made a lot of sense because it’s what allowed them to compete with Netflix early on and to score licensing deals. If anything represents traditional television on the internet, it’s Hulu. Plus, the subscription model was working. And growing.
That leaves the question of what dropping Plus and what Hulu will do going forward unanswered. My sincere hope – given some life by Hopkins’ appeal to quashing confusion – is that Hulu will either follow a Pandora-like model where they rely solely on ads (that can be skipped by completing a task or by watching a one-time extended sponsor ad up top) or where they rely solely on the relatively inexpensive subscription model without commercials at all.
That second situation seems unlikely. Hulu’s infrastructure is set up for selling and loading ads, but there’s also a third option: create an alternate to Plus that works the way Plus should have, by eliminating ads for those who are willing to pay to opt out. As long as they can keep their free users engaged and balance that out with their lust for more paid subs, everyone will be happy.
Related Topics: Hulu
