General Electric (NYSE: GE), News Corp. (NYSE: NWS) and Disney (NYSE: DIS) know that the way consumers take in their television is changing. While these companies and other broadcasters are still nervous about how they will turn a profit when Google TV (NASDAQ: GOOG) replaces Time Warner (NYSE: TWX) cable programming, they are at least exploring options. One experiment is now ready for primetime. Late last week, the ABC, NBC Universal and Fox joint venture Hulu brought its subscription service Hulu Plus out of beta mode, giving its widening user base access to full seasons of current shows for just $10 per month. Hulu Plus has been available for online users using Web browsers as well as connected consumer electronics like Apple Inc.’s (NASDAQ: AAPL) iPad and iPhone 4 as well as Sony’s (NYSE: SNE) Plastation 3 since last summer, but users needed an invitation to subscribe. Now that the service has fully launched, Hulu Plus is open to anyone, as the slogan says, “anywhere, anytime,” provided they have a credit card and a spare monthly $9.99.
Hulu Plus is just one of the digital initiatives that Disney and News Corp. are pursuing. The two companies added their television programming to Apple’s new 99 cent rental store on the iTunes service earlier this fall when the new Apple TV was released. Despite the willingness to explore new ways to monetize their television properties as audiences turn away from regular broadcast and cable programming and stop buying DVDs, they’re still leery of new venues. All major broadcasters, including those listed previously among others like CBS (NYSE: CBS) and Viacom (NYSE: VIA), have expressed concern over services like Google TV. Unlike Hulu, Google’s new software — which is currently built into set-top boxes from LG Electronics (Pink Sheets: LGEAF) and televisions from Sony — includes the ability to search the entire Internet for a program. This means a user looking for an episode of NBC Universal’s 30 Rock could search for the show and find options to watch it on Hulu, NBC.com, the channel NBC, Comcast (NYSE: CMCSA) OnDemand, Netflix (NASDAQ: NFLX) and even video hosting websites carrying pirated episodes. This is the sort of scenario that has broadcasting and cable companies concerned about how to guarantee a reliable advertising revenue stream. Hulu Plus, at least, is toying with a new form of subscription-based revenue. It’s worked for Netflix, and now it may work for GE, News Corp. and Disney’s shareholders as well.
Cable and satellite providers, meanwhile, are beginning to feel left out in the cold. Hulu is hurting the pay television industry, said Bruce Eisen of Dish Network (NASDAQ: DISH) at a panel during the Streaming Media West conference last week. “If people decide that they don’t have to pay for pay TV, then one of the pillars (of the TV industry) starts crumbling,” Eisen said, as reported by GigaOM. Depending on the investor, Eisen’s comments either read as either a warning of troubled times to come or sour grapes. To shareholders in television production companies, though, the full launch of Hulu Plus could signal the future of the business in the digital landscape.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
