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Hulu's growing pains might mean shift to cable-style subscription. But do we still need Hulu?

hulu-logoHulu’s future remains up in the air thanks to all the cooks in its Internet kitchen: According to a Wall Street Journal article today, the site’s owners are “increasingly at odds over Hulu’s business model,” and that Fox and ABC might pull their programming. But things could get even crazier than that:

Hulu management has discussed recasting Hulu as an online cable operator that would use the Web to send live TV channels and video-on-demand content to subscribers, say people familiar with the talks. The new service, which is still under discussion, would mimic the bundles of channels now sold by cable and satellite operators, the people said.

Wasn’t Hulu supposed to be one of my alternatives to bundled cable or satellite?

As a faithful Hulu watcher and long-time devotee and Hu-vangelest, it pains me to wonder this, but: Why did companies like Fox or NBC train viewers to find their content on Hulu, rather than on their own sites? Hulu’s once-essential asset was that it became synonymous with online availability: “Is it on Hulu?” meant “Can I watch it online, for free, legally and easily?” Except now, there are lots of non-Hulu options, and as Netflix continues to grow in the streaming and TV marketplace, Hulu seems more and more like a blip. (For perspective, from the WSJ story: “In 2010, Hulu reported revenue of more than $260 million, up from $108 million in 2009. Netflix, which also rents out DVDs, had revenue of $2.16 billion last year.”)

And thus we’re left to wonder not just how Hulu might save itself, but also if it should. With all the ways to watch content online, do we still need Hulu? Is there a difference between watching something on Hulu and watching it on, say, ABC.com or something? Not anymore, which is too bad, because once upon a time, Hulu’s calling card was how much better its site was than everything else. It was clean, it was consistent, and it was stable. Now that other sites have caught up, Hulu’s luscious UI doesn’t seem like enough anymore.

So what could Hulu do that would be its big, business-busting idea that would again put it at the forefront of online video consumption? Night-of programming. Right now, Hulu’s caught between the premium, paid Netflix model and the free, renegade, and illegal online viewing options. Hulu Plus just didn’t stack up to Netflix. But what if Hulu could effectively compete for the audience that now just fires up some crappy Megavideo version of the show that aired just hours before? I’d pay for that, as long as it was a la carte, and thus distinct from obnoxiously bundled cable packages. A live or nearly-live option is exactly what could revive the company – not to mention fully distinguish it from Netflix. Perhaps those owners and executives are on to something….

Put on your MBA caps, bust out your telcom know-how, and hunker down with all the major TV CEOs you can conjure: What would you do with Hulu, PopWatchers?

Originally posted January 27 2011 — 11:55 AM EST

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