Want to watch TV on Hulu? Get ready to pay up or wait.

Jason Kilar_ CEO of Hulu10344

In all the talk over what Hulu will look like in the future, who would buy it and what they would actually be getting, details around the online video provider’s new deals with its broadcast content partners have begun to leak out.

For consumers that rely on the service for catching up on their favorite TV shows, all news coming out of those discussions is bad news. For instance, Variety reported that a new deal with Fox would keep popular TV shows like Glee and Family Guy on the service in exchange for a heavier ad load appearing alongside those episodes.

But the bigger story might be that Hulu’s broadcast partners are asking it to begin verifying that viewers are cable subscribers in order for them to get next-day access to episodes on the site. Buried within yesterday’s LA Times article on a possible sale of Hulu comes this blurb: (hat tip to Peter Kafka for pointing it out.)

“Changes in the familiar Hulu service could also make the company less attractive to a buyer. For example, Hulu’s owners are pushing for the free service to require users to prove they are cable or satellite TV subscribers before they could gain next-day access to current shows, said two people privy to the discussions. Otherwise, they would be forced to wait eight days to catch up on programs they’ve missed, they said.”

So let’s break this down. If you want to watch broadcast content on Hulu in the future, you may have to either:

  1. Pay to be a cable subscriber
  2. Pay to be a Hulu Plus subscriber
  3. Wait a week to “catch up” on shows you’ve missed

It’s not terribly surprising that broadcasters would begin implementing TV Everywhere-type authentication on Hulu. In January, we argued that providing such capabilities would help provide peace of mind to cable companies, increase retransmission fees broadcasters can collect, and could just be Hulu’s best chance for survival.

That said, even though TV Everywhere services like Comcast’s Xfinity Online and HBO Go have gotten consumers used to the idea of signing in to watch on-demand programming they already pay for, there are some clear problems with this plan. For one thing, while most consumers nowadays pay for cable to get access to broadcast shows, most don’t have to: these shows are available for free, and in HD, through over-the-air signals. In that sense, the broadcasters are asking Hulu to create a pay wall for content that they already give away for free.

On top of that, not every cable provider is ready or capable of providing authentication for its viewership, and even when it is, those services aren’t always seamless. Hulu’s authentication roadblock could end up needlessly disenfranchising viewers who actually do pay for cable, but don’t have access or can’t figure out how to access Hulu with their cable login.

And finally, there’s a whole class of users that for whatever reason don’t pay for cable at all. Adding authentication is the type of decision that will drive them to piracy or to other types of content, which is bad for an industry that wants to monetize as many eyeballs as possible. If Fox, for instance, wants to increase revenues by showing more ads on Hulu, setting up a roadblock to viewership is precisely the wrong way to make sure those ads are actually seen.

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