For a while Hulu was the place to go for entertainment on the Internet. But now the company really needs to hurry up and sell while its perceived value is still high.
Yesterday we reported that Hulu was considering offers from interested buyers that are expected to be as high as $2 billion.
It’s great that Hulu has created something of value that others want to purchase from them, but if they really want their payday to be huge then they need to sell ASAP and not look back.
Why? Because Fox’s (one of Hulu’s owners) recent actions are already causing people to turn to piracy to watch the popular Fox shows they used to be able to view on Hulu.
If you didn’t already know, Fox recently changed their policy on letting people watch their shows the next day online through Hulu and Fox.com.
Now if you want to see the newest episode of a popular Fox show you have to tune in exactly when it airs on TV or you are forced to wait 8 days.
You can also get a Hulu subscription if watching your favorite Fox show through an approved channel means that much to you.
But you see, people don’t like to pay for things they can get for free, especially if it’s something that is already given away for free over the TV.
That’s why, according to an article from TorrentFreak, Fox’s 8-day delay on Hulu has led to a surge in piracy. No real suprise there, right?
So not only is Hulu doing something that is angering its fan base, they’re also driving them away from viewing their many ads. The ads are what made Hulu what it is.
Sure, Hulu was free at one point but they still made people sit through ads, just like on TV. And it was indeed generating revenue for them. It was also one of the only ways that the entertainment industry was able to somewhat deter a certain amount of piracy.
Then Fox decided that they wanted to encourage people to watch their shows live when they air. And that basically changed everything.
Fox is well within their rights to air their shows however they wish, even if their way makes little sense. Their way is going to drive a lot of people away from seeing the ads that Hulu needs so much.
People were willing to sit through these ads if it meant they could watch their shows from a trusted source. Yeah, maybe it’s not the super-profitable business model that all of Hulu’s network owners would like, but it’s certainly better than nothing.
Hulu might want to think about getting that potential billion dollar sale done quickly because the more their network ownership drives people away from the site, they more they drive people from the ads of major corporations.
And the less profitable the operation becomes.
It will be very interesting to see what Hulu will look like under new ownership. Will they still have the deals with all of the networks? Will they create original programming exclusively for Hulu?
Whoever becomes the new owner of Hulu might want to think about going back to the original business model. The subscription service is fine, but if they want it be profitable in the future they will need to give people who are familiar with piracy a good reason to come back.