Hulu Examines its Business Model: Online Cable Operator?

Internet TV pioneer Hulu is reportedly in discussions to transform its business model. Since its 2008 launch, Hulu has been one of the leaders in free online television delivery and web-video ad dollars.

The Wall Street Journal reports that Hulu’s three owners (NBC Universal, News Corp. and Disney) are concerned that free Web versions of their TV shows are cutting into their traditional business, and the three are at odds regarding how much of their content should be offered for free.

News Corp.’s Fox Broadcasting and Disney’s ABC are considering pulling some of their free content from Hulu (and selling more content to Hulu competitors), while Hulu management is discussing the idea of retooling Hulu as an online cable operator that would use the Web to provide live TV channels and video-on-demand content to customers. If they opt to move forward with such a plan, some form of Hulu’s free service would likely remain and it is possible Hulu Plus could be folded into the new service.

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