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Originally featured on BroadcastEngineering.com
May 3

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5/3/2012 4:15 AM  RssIcon

Hulu, the popular online service for television viewing, may soon switch from being free to requiring users to prove they are pay television customers, the “New York Post” has reported.

Hulu, the report said, attracted 31 million unique users in March under a free-for-all model. But the newspaper quoted sources saying the move by Hulu toward the new business model—called “authentication” because viewers would have to log in with their cable or satellite TV account number—was behind the move last week by Providence Equity Partners to sell out its share of Hulu after five years.

Hulu, owned by News Corp., Disney, Comcast and Providence, could see its March audience, as measured by ComScore, shrink after authentication. Hulu had $420 million in ad revenue last year and is expected to do well in this year’s ad negotiations.

For certain shows previously free Hulu or Hulu Plus users must now authenticate with Verizon or Dish to gain access to the programming.

Free Press, the public interest group, said it’s questionable whether Comcast could live up to its deal with the FCC for the merger of NBCU if it agreed to the deal. It called for the FCC to investigate.

“Where there’s smoke, there’s fire, or at least a compelling reason to investigate,” said Matt Wood, policy director for Free Press. “Under the terms of its acquisition of NBCUniversal, Comcast is forbidden from influencing Hulu’s operations. Today’s announcement looks an awful lot like an example of such influence.” Comcast denied any influence.

The move toward authentication would please cable operators because it could slow cord-cutting by making cable subscribing more attractive. Fox, owned by News Corp., is expected to begin talks soon with Comcast on a TV Everywhere deal that will require authentication, the “Post” also reported.

Hulu would not comment. Mashable Entertainment said that Hulu is in talks with networks about adding more TV Everywhere login options. However, it reported that Fox has been the most aggressive of the partners when it comes to restricting content to cable and satellite subscribers.

Fox’s agreement with Hulu allows Hulu Plus next-day access to 95 percent of its content. For certain shows, such as “The Simpsons,” free Hulu or Hulu Plus users must authenticate with Verizon or Dish to gain access to the programming. One source told Mashable the Hulu deal may be centered on only Fox restricting more of its own programming.

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