Hulu may have reimagined television content on the Internet almost three years ago, but lately the video-on-demand website's business has not been doing as well as its owners would have liked. And now The Wallstreet Journal has learnt internal meetings have recently taken place to figure out new ways to make the company more profitable.
Among the current concepts being pitched, making Hulu a live cable provider that would send television channels to the Internet along with the currently available video on demand content is not only the most radical but the most in sync with the ever-changing philosophy of TV viewers. Nielsen Media, the company behind counting television ratings, found that viewers aged 18 to 49 (the most important demographic in terms of advertising dollars) watching TV traditionally was down 1.3% in Fall 2010 from the same time in 2009. That was the biggest drop in nearly four years. Nielsen is also hoping to begin counting online views as ratings for TV shows starting this year, but only if the online version has the same amount of ads as its traditional TV counterpart. If Hulu doesn't find some solutions soon, the media companies are ready to start removing their content, or at least delaying posting new videos for two weeks.
Fox Broadcasting, owned by News Corp., and ABC, owned by Disney, are near ready to pull the plug on their ad-based, free content. Meanwhile, NBC Universal (NBCU) has been somewhat in a conflict of interest; when NBCU began negotiation a merger with Comcast (which recently was approved by the FCC) they had to let go of their management rights over Hulu, forcing them to also share their content with Hulu competitors, like Netflix.
Netflix, as it so happens, has been thriving amidst Hulu's apparent inadequacies. In accordance with that, last year, Hulu released Hulu Plus for $7.99 per month. Jason Kilar, CEO of Hulu, however, reportedly wanted to lower the cost to $4.99 to be more competitive. But Netflix has been more advantageous, the service is available on more devices than Hulu while also having more content. Albeit, that content is not as new as Hulu's but that could slowly change. Revenue for both Hulu and Netflix in 2010 was $260 million and $2.16 billion, respectively.