Once the hottest thing on the Web, Hulu is now retrenching as the video-streaming market matures and shifts. According to a Wall Street Journal article, the company -- which includes the parent companies of Fox, NBC, and ABC as investors -- has decided against filing an IPO to raise money and is considering additional subscription plans to supplement its current Hulu Plus offering.
Hulu recently rolled out its first paid plan, which charges $7.99 per month for older video content that isn't available to viewers accessing the free site, in the hopes of raising revenue beyond the ads it places in its episodes. Despite dropping the Hulu Plus price from an initial $9.99 per month, the company says that the subscriber count has outperformed expectations.
However, Hulu is running up against a couple of major obstacles, one external and one internal. The outside factor is Netflix's success with its streaming service, and while it offers little in the way of new TV episodes and movies, it does have an extensive catalog of titles that Hulu Plus lacks. A major reason for Hulu's need for more cash is to obtain additional content that would make its subscription plan more attractive.
The company is also facing pressure from its content partners to come up with other pricing plans that provide more revenue to those partners. No details were reported about such plans. But those partners would need to open up their archives fully in order to justify new pricing, especially as Netflix aggressively pursues content for its service -- even inking deals with Hulu's partners. After all, there's a good reason Hulu Plus already received a price cut. Maybe charging $9.99 per month for a version of Hulu Plus that eliminates all ads would be a good start.