Rumor has it that Hulu is going to start charging for content, as early as 2010. As well they should. TV is a product, entertainment no less, that people should pay for. And I can buy that a couple 15-30 second commercials per episode are not going to recoup the cost of making high-budget TV. True, shows make money in other places, in fact I could see hulu increasing DVD revenues as many users will want to own the box set. But it was inevitable that the honeymoon of free TV with limited ads would end, and it looks like that time is near.
The Mashable article in particular talks a lot about how Hulu has to "not screw this up" or else it will have some kind of angry internet revolution on its hands. No worries, hulu, if you're listening out there I'll tell you exactly what you need to do to keep people happy.
- Make it easy. Considering how well-run hulu is right now, I hope this won't be a problem, but this is a huge issue that many industries aiming at 2.0 status are ignoring. Keep supporting all platforms, don't require too much 3rd-party software (ahem, I'm talking to you Netflix/MS Silverlight), and continue to let people easily watch TV from their couches.
- Make it worth it. People will pay for a product if they think they're getting their money's worth. As long as the price is reasonable, I'd be happy to pay for the content I'm getting on hulu. And companies can charge reasonable prices by keeping costs low and cutting the fat, i.e. the people/companies that are making a disproportionate profit off of a product, often at the cost of progress and consumers getting better quality goods (Hey Comcast! you're the FAT!)
Examples
Who's Doing it Right: Last.fm
Last.fm has a free version supported by ads and paying subscribers, an easy-to-use API that lets it integrate with many popular music players (easy to use!), and makes the paid version worth it (~$4 USD per month for tons of music, no ads, and a "Love" station with only your favorite songs).
Who's Doing it Wrong: Rupert Murdoch
Even disregarding all the Murdoch vs.the Internet rumors of late, the media mogul does actually seem to be living in the dark ages. In my mind, Murdoch is making two crucial mistakes. One, he is taking a product that people expect to get for free (namely: the news), and assuming those people will be suddenly be willing to pay for it without giving them any additional incentives. The ship for paying for online news has sailed, Murdoch has missed the boat, and he needs to get a new profit model. The other mistake, though, is that important information, especially in regards to current events, should be free and freely-accessible. It is in a different class than TV entertainment; it is important to people's lives and the world around them. And with social media and the instant spread of knowledge and news, Murdoch simply isn't going to be able to build a fence to keep "his" information away from the world (although I wouldn't mind if he put a fence around Glenn Beck...).
In summary, if products are easy to buy/use and worth the money, companies won't have to worry about it getting pirated. And if there is a free version as well, the chance of lost profit due to poor teenagers is even lower. And besides, those broke teens will most likely turn into zealous fans once they get jobs and their time is more valuable then their money.
So attention Apple, Sony, Microsoft, and Rupert Murdoch: DRM is hard! Soft/hardware that doesn't play nice together is hard! And if it's easier to steal than to buy, people will steall it! And to hulu: Do you take Paypal?
