Online video service Hulu continues to move forward in an attempt to compete with YouTube, Netflix, Redbox, and other rival content distributors across multiple fronts.
It's possible Hulu will need to try to shift focus to avoid problems, even if that means attempting to act more like a traditional cable operator. The company is poised to possibly give on-demand content and live TV channel coverage to viewers in the living room, if management decides to go that direction.
Even though the site has drawn interest from millions of Internet users, and reportedly generated $260 million in revenue in 2010, the video service isn't generating enough money to keep executives happy. Rival Netflix was able to collect almost $2.16 billion in 2010, and recently topped 20 million subscribers.
"When we blaze trails, which is what Hulu is about, it takes time," said Jason Kilar, Hulu CEO, in the interview with the Wall Street Journal. "That is not for the faint of heart, and we understand that."
Hulu management and its parent companies appear to be at odds over how the service should evolve. Now the broadcast studios that own Hulu are contemplating the removal of more content from the free Hulu service.
If Hulu does lose more content, it could be a major issue that will be difficult to fix. Netflix and Redbox have endured 28-day sales windows to appease copyright holders, while Hulu and other online movie services are left scrounging around for content. However, Netflix and Redbox have been able to succeed despite the sales windows, and Hulu still hasn't been able to attract many paid users.
The Hulu Plus $7.99 monthly service hit Roku and other devices in 2010, but consumers still remain skeptical about whether or not people will join the paid service. In addition, the overall popularity of the service took a direct hit even before they tried to integrate Hulu Plus in the living room via set-top boxes and other devices.
I think 2011 will be a sink or swim time for Hulu, because even more competitors and services are entering the space in 2011. Honestly, I don't think even trying to turn into a paid online cable operator will help. I don't think it'll work as a long-term business plan, either.
