If you love watching TV shows on Hulu but don’t have a cable subscription, things could get a bit more complicated in the near future. According to the New York Post, Hulu could soon start requiring its users to prove that they also have a cable or satellite subscription. This would obviously turn Hulu’s current business model on its head. It’s not clear how many of the service’s 31 million users currently don’t subscribe to cable TV, but chances are that the service’s audience would shrink after this move.
Keep in mind, this is just a rumor for now, but it’s definitely worth keeping an eye on. It’s also not clear if this subscription requirement – assuming it is actually going to happen – will just apply to Hulu’s free service, or if it will also apply to Hulu Plus subscribers. Hulu Plus, which costs $7.99 per month, currently has somewhere between 1.5 and 2 million paying subscribers.
Update: We just talked to a source close to Hulu. According to our source, Hulu and its content providers have talked about this move toward authentication since 2009. Our source noted that Hulu has no interest in being a first mover here and that a requirement for authentication is likely still a few years out. Hulu, however, does want to be a good partner and may have to give in to its partners’ pressure soon or later. Even though an authentication requirement isn’t likely to happen right away, though, our source notes that what could happen relatively soon is that the content providers could require longer delays before their shows become available on the service for non-subscribers. Cable subscribers, under this model, would get access to a show on Hulu the next day, while non-subscribers would have to wait at least 30 days. This model would likely also apply to Hulu Plus subscribers.
As our own Alexia Tsotsis noted last year when the FCC gave the go-ahead for the Comcast-NBC merger, it issued a number of specific rules to ensure that this merger wouldn’t influence Hulu’s operations. These rules, however, did not specifically touch upon any future provisions that would tie access to Hulu to a cable subscription.
NBCUniversal, News Corporation, The Walt Disney Company and Providence Equity Partners currently share ownership of Hulu. There have been persistent rumors that Providence Equity Partners is looking to sell its stake in the company to the rest of the owners, though. The New York Post’s Claire Atkinson argues that this move toward an authentication model is one of the main reasons why Providence Equity Partners is trying to sell its stake in the company.
We asked Hulu for a comment about these rumors and will update the story once/if we hear more.
One group that has already commented on these rumors is Public Knowledge, a group that works to “preserve the openness of the Internet” and promotes “creativity through balanced copyright.” In a statement, the group’s president and CEO Gigi B. Sohn writes that “restricting access to legal content will only drive consumers to find illegal content. In particular, we are concerned about restricting access to TV programming available over free over-the-air broadcasting. It should be available online, regardless whether anyone subscribes to cable or satellite TV. By putting more restrictions on consumer access to popular content, the entertainment industry only removes any justification for stronger ‘anti-piracy’ laws it is perpetually seeking from Congress.”