Hulu, a free online video outlet, has plenty to celebrate after three years of success. Hulu has successfully brought television programming into the mainstream. And with talks of going beyond the computer screens with becoming an application for Apple’s iPad, more success is predicted in the year to come. But along with success comes some dissatisfaction. The companies that supply Hulu’s content are pressuring Hulu to set up a subscription service along with earning more advertising dollars. Now, Hulu collects various types of videos and makes them free, supported by advertisements. But if Hulu decides to bring its service to other devices it would be difficult to balance satisfaction among consumers, content companies, and advertisers. Hulu has blocked services that would allow consumers to access content through their television sets, because it would affect cable and satellite subscribers, a steady source for media companies. In order to provide their services for other devices Hulu would have to find new sources of revenue.
Being that online programming is becoming more popular it is putting advertisers into a difficult space. By watching videos online, consumers are not exposed to advertising as much as they would be if they watched actual television. When watching an hour long program on television, viewers are exposed to an average of twelve minutes of advertising, whereas, online viewers are exposed to an average of two-four minutes of advertising. Advertisers try to make profit by using product placement in many of the programs, but is that enough? Online programming outlets, like Hulu, are seeking ways to provide a free service while entering into new device outlets, but without new sources of revenue this may be impossible.
How does this affect the average consumer? People may soon have to pay for online programming. College students and travelers are especially affected because they are the main viewers who access online programming. The growth and popularity of online viewing raises many problems. Companies loose money, while other companies gain money. Where is the balance?
Thoughts?
-Dominique
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