Should Hulu remain free?

In the wake of comScore’s findings that Hulu is now the fourth-most visited video portal with 333 million unique visitors in February, PaidContent.org reports that The Walt Disney Co. is seriously considering adding content from ABC.com to the site.

Comparatively, Disney Online — and note correction here: which DOES NOT include ABC.com — is the ninth most-viewed U.S. online video portal, with less than two percent market share. Even though Hulu’s traffic jumped 42 percent in February, it’s only got a bit more market share than Disney. YouTube remains the leader by far with 41 percent market share.

If ABC finally jumps aboard Hulu, I would expect Hulu’s market share to grow at a faster pace. It would also put pressure on CBS to get on board, even though it’s currently embroiled in a legal dispute with Hulu after launching direct Hulu competitor, TV.com.

According to PaidContent, Disney is haggling over the equity stake it would get in the joint venture created by News Corp. and NBC Universal. Unsurprisingly, Disney wants a parity interest; NBC and Fox believe they should maintain greater stakes due to being the portal’s founders.

What I wonder is what will happen to network TV should all of the broadcast networks (and if CBS eventually signs on, I would expect The CW to be part of that deal) offer their shows via one online portal. Hulu could automatically become that IPTV cloud that we tech-y writers occasionally mention. Considering the cable ownership of Disney, NBC Universal, News Corp. and CBS - I won’t list all of the networks but they include ABC Family, Soap Net, Bravo, USA, SciFi, Oxygen, F/X and many regional sports networks - a union of all four conglomerates could provide consumers with a virtual online cable/satellite service. A consumer could just plug a computer into a TV and voila - many, many popular shows would be available on demand for free. Said consumer would have to watch a bit of advertising, but it’s still nothing compared to the number of ads he would watch on network television. And that’s not me having some crazy thoughts about the future, that’s something that can happen now. The more shows available on Hulu, the less need to pay for cable.

I watch TV via a TiVo hooked up to my Comcast cable system. I get practically every channel that it’s possible to get. I’m not sure how much I pay for this month - it’s bundled with my Internet and phone - but let’s estimate $60/month.
At this moment, I like my TV service enough and I’m employed enough that I don’t want to dump it and rely on a computer hooked up to the TV instead. But should it come down to that, it would be very easy to do. We already have a high-speed computer hooked up to our HDTV and we do watch some things through that set up, even though we have all these channels plus Netflix. (It’s a miracle anyone does any work in my household, no?)

It’s a good thing I work from home in a secret location or rioters might appear at my house for saying this, but the free online distribution model doesn’t seem like the best idea for the TV industry. Look where it’s gotten them so far. Instead, I think the cable guys have a much better idea with TV Everywhere: if you already have a cable subscription, you can access it online from wherever you are. That way, cable subscribers are getting their “watch it anywhere, anytime” needs met and there’s still a revenue stream. And there’s really nothing bad about having a revenue stream.

I know Nielsen this week came out with an exhaustive study basically saying that people still watch their TVs far more than they watch TV on their computer, but if the TV industry keeps giving people these reasons to stop watching TV, eventually they are going to catch on and change their ways.

Save yourselves while you can, networks! Sign every content provider you can find on to Hulu, but stop giving away the milk for free. I harken back to a previous post when I posit that advertising can’t support the glut of media we now have. Keep some of the site free and ad-supported but wall off other sections, make those premium, and offer all-access subscriptions.

I love free TV too but nothing’s really free. I’d rather pay and have TV thrive than get it for free and have nothing to watch but cheap reality shows, an hour of Brian Williams in access, and Jay Leno at 10 p.m. every night.