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TV in real dime
Hulu, networks to change model of free streaming
By CLAIRE ATKINSON
Last Updated: 8:37 AM, April 30, 2012
Posted: 11:34 PM, April 29, 2012

Viewers who stream network TV shows may soon discover the free ride is not so free.

Hulu, which attracted 31 million unique users in March under a free-for-all model, is taking its first steps to change to a model where viewers will have to prove they are a pay-TV customer to watch their favorite shows, sources tell The Post.

In fact, the move by Hulu toward the new 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 cash out of Hulu after five years, these sources said.

And it’s not just Hulu making it tougher for cable-cutters to stream shows and other content.

Fox, owned by News Corp., which also owns The Post, is expected to begin talks soon with Comcast on a TV Everywhere deal that will require authentication. Plus, Philadelphia-based Comcast is expected to switch to an authentication model for this summer’s Olympic Games (see story at right).

The move toward authentication is fueled by cable companies and networks looking to protect and profit from their content.

The effort comes as entertainment companies continue to face drastic shifts in home viewing habits. Overall spending on home entertainment edged up 2.5 percent to $4.45 billion in the first quarter as a surge in digital streaming — which rose more than fivefold to $549 million — offset a continuing collapse in video rentals, according to Digital Entertainment Group.

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

But the move toward authentication, which could take years to complete, will make cable companies happy because it could slow cord-cutting by making cable subscribing more attractive.

At the same time, networks are asking cable companies for retransmission money, a process that could be more appetizing for Comcast and its rivals if their subscriber base stopped shrinking.

To be sure, Hulu’s slow move toward authentication comes amid a jumble of cable and network game plans for streaming — which remain a strategic nightmare thanks to the complicated nature of the TV Everywhere initiative, which is aimed at keeping top shelf digital video exclusive to pay-TV subscribers.

Comcast’s own NBCUniversal, for example, has a patchwork approach to authentication.

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AT&T U-Verse
Charter
Cox
Dish
Mediacom
Optimum
RCN
Suddenlink
Verizon
Wow

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