Hope for Hulu

Online streaming has supplied consumers with a unique option to instantly watch selected shows for free with limited interruption. At a time when viewers expect immediate supply of information, this development is necessary for the television industry. Comcast and Time Warner’s “TV Everywhere” initiative is ultimately a genius idea to promote the success of cable providers to obtain market share in the premium content online business.                                

Although this idea may be successful, due to the control the television industry has over consumers, it is likely that viewers will continue to use sites such as YouTube and Hulu. These sites offer two distinct advantages compared to cable providers: no charge and short advertising spaces. If Hulu changed its revenue model to subscription based or pay-per-view, its consumer base would diminish drastically. This negatively impacts the website as its success relies on cross- sided network effects to influence its three main groups of customers, content owners, users, and advertisers (its major source of income).

A potential option for Hulu is to implement a freemium model. Since the company has already generated a large viewer base, the company could offer versions to consumers, for example, options of decreased advertising, enhanced picture quality, or increased offerings of content. This allows the company to capitalize on tailoring to the needs of its consumer groups at a low cost. Additionally, it further supports the company’s advertising strategy to not only complement television, but also to create a more targeted, interactive and effective advertising experience.

The future of the television industry resides in the option to instantly download and watch a program. Whatever the revenue structure may be, consumers are relying on Iphones, Ipads, and computers for quick and quality information. Thus, it is imperative that companies such as Time Warner and Hulu fully research and implement technological savvy downloading techniques to remain competitive in the television industry.