Is Hulu Helping Or Hindering Cable TV?

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tvstatic3.jpgADOTAS — Hulu, the online video site, lured new viewers through prime time television.

It convinced viewers that they were missing out on something big. The spot ran during the Super Bowl and featured Alec Baldwin calling Hulu an “evil plot to destroy the world,” a line many networks are beginning to find eerily prophetic.

NBC Universal and News Corp. launched Hulu only last year, as part of an effort to regain control of their own shows online, which were rapidly being posted by users on YouTube. Hulu offers full-length TV shows with short advertisements interspersed, usually as little as half a minute each. On Hulu, the same shows appeared as on YouTube, but with full quality picture on a larger screen – oh, and with commercials.

The site currently has 42 million viewers and almost 150 content partners. It offers both television shows and full-length movies, and it has also added the archives of many beloved TV shows of yore like Bewitched and Charlie’s Angels.

Bad news?

With viewers rushing to see videos online, this may seem like bad news for cable networks. But wait a minute – wasn’t the site launched in the first place by cable networks? And if so, why weren’t they panicking?

The fact was that online viewing didn’t decrease the demand for cable shows on television. It actually increased them, or at the very least demand held steady. Fox actually gave a public statement saying that posting full-length episodes of their shows on Hulu increased their viewers.

Cable networks were benefiting from having their shows online. Cable operators, on the other hand, were still in the panic zone.

Though the networks are enjoying some nice upticks in the number of people who are watching their shows, cable operators are terrified that they’ll lose subscriptions. If all cable shows – or even the most popular ones – are available online, cable operators worry that there’s little reason for anyone to maintain a cable subscription.

That fear is driving cable operators’ insistence that cable networks limit the number of shows they put on Hulu. It may also be having some effect on which shows they allow Hulu to post, and how.

Some networks currently refuse to give popular shows to Hulu, thinking that their popularity may entice people to keep their subscriptions for the sake of those favored shows alone.

Can’t hardly wait…

Another strategy is only allowing a certain number of shows to be posted at any given time. Fox’s Family Guy and House M.D., for example, only post five shows at a time, and the most recent show is only posted online a week after it airs on cable. The logic goes that viewers who want to stay on top of their most beloved shows won’t be able to wait a week to find out what happened on the season finale.

Whether these strategies are getting results is hard to determine, since thus far, they’ve all been pre-emptive. There’s no evidence that cable subscriptions are dropping off as a result of Hulu’s existence, but cable operators are taking no chances. What if the week after they post their most popular shows, their subscriptions are cut in half? For cable operators, it’s not worth the risk.

One strategy may be to start airing only previously-aired episodes of shows, instead of the most recent ones. This strategy allows new viewers to get interested in and attached to new shows, but it also means that in order to see the most recent episodes, they’re going to have to get that cable subscription.

Hulu hasn’t hurt the cable industry so far, and it’s actually helped it retain control of both its shows and its ad revenue. It might be time for the cable industry to start putting a little faith in Hulu, and begin to experiment with new strategies that will make television and online viewing complement one another. If viewers are willing to watch both – and so far, the evidence shows that they are – instead of losing their market, they may actually double it.

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