Hulu Bids Goodbye To Its Free Service
August 08 2016 - 11:00AM
Dow Jones News
By Shalini Ramachandran and Deepa Seetharaman
Free Hulu is coming to an end.
Don't cry too much. We've all known that the streaming video
service has been emphasizing its subscription offering over its
free service for the past couple years. But Hulu's deal to license
its free content to Yahoo, announced Monday, is the last nail in
the coffin.
Over the next few weeks, Hulu says, it will phase out its free
offering, which until now has allowed people to watch the most
recent five episodes of several ABC, NBC and Fox shows for free,
after an eight day delay.
Viewership of free Hulu has declined and relatively few Hulu
visitors today stream those episodes. As Hulu has beefed up its
subscription offering with originals like "Casual" and library
deals for big titles like "Seinfeld," it has promoted those on its
site, making the free episodes increasingly difficult to find.
"Our limited free offering simply isn't aligned with our focus
on creating the best experience possible and delivering the best
content we can to Hulu subscribers," said Hulu Senior Vice
President and Head of Experience Ben Smith.
The move shows how far Hulu has evolved from its origins. The
company launched in 2007 as a free, ad-supported service carrying
full-length episodes of recently-aired broadcast TV shows, in a bid
by its media company owners to battle digital piracy and offer an
alternative to YouTube.
It launched its subscription tier in 2010 and then began
offering a higher-priced ad-free service last year. The company is
now in talks with TV channel owners to create a virtual cable TV
service with live channels and on-demand programming that would
launch next year.
Time Warner Inc. last week said it has agreed to buy a 10% stake
in Hulu, joining existing owners Comcast Corp., Walt Disney Co.,
and 21st Century Fox.
Hulu's news came as Yahoo said it would launch a new online
video portal called Yahoo View just seven months after shutting
down its previous video hub called Screen. Hulu's free show
episodes will anchor the new offering, but Yahoo said it would also
make available short video extras as well as posts from Tumblr
about the content.
Eventually Yahoo may include a section showing users the outfits
worn by characters in a show, powered by Polyvore, said Jess Lee,
vice president of product at Yahoo. Yahoo said it has no plans to
get back into original programming, which proved to be a
money-losing venture.
Hulu and Yahoo will split advertising revenue with ads sold by
Hulu. "Hulu, through its partnerships and ownership structure, has
very high (advertising rates), that's a known fact in the
industry," said Phil Lynch, Yahoo's head of media partnerships.
Already, the free episodes available on Hulu can also be found
elsewhere on the web. Hulu has other distribution partners like
Comcast's xfinity.com, People.com, Time.com, and Vulture. In
addition, each of the broadcast networks' sites, like abc.com,
nbc.com, and fox.com, carry those recently-aired episodes.
Yahoo's Mr. Lynch said it is too "premature" to say if this
content would appear on Verizon Communications Inc.'s Go90 online
video service after Verizon's deal to buy Yahoo is finalized.
After Yahoo started Screen in 2013, it spent more than $100
million to produce its own shows, excluding the cost of employees,
and brokered deals to syndicate high-profile shows like "Saturday
Night Live." Yahoo Chief Executive Marissa Mayer hoped it would
bring in premium advertising dollars, but Screen failed to gain
traction with users or create a meaningful source of revenue.
Write to Shalini Ramachandran at shalini.ramachandran@wsj.com
and Deepa Seetharaman at Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
August 08, 2016 10:45 ET (14:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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