Hulu Could Charge Subscriptions, Says Disney's CEO

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Pay walls on the Internet are officially in vogue.

According to Disney CEO Bob Iger, Hulu — the online-video venture he just took an ownership stake in — might go the walled-garden route at some point.

In addition, Iger said at a conference presented by Fortune magazine, Disney is developing its own Web site that would make available movies, TV shows and games to consumers who pay for a subscription, according to an Associated Press report.

“We have ample evidence both in traditional media and in new media that people are willing to pay for quality, they’re willing to pay for choice, they’re willing to pay for convenience,” Iger said. “It’s possible that Hulu will look at monetizing as well. It may be not just selling ads.”

The cable industry has already moved into experimentation phase with “TV Everywhere”: the idea that pay-TV subscribers can access a smorgasbord of programming on the Web as part of their service. Comcast has roped in 23 nets so far, for a 5,000-home trial supposed to start this summer (see Comcast Swells Web-TV Roster).

However, Iger is still skeptical that TV Everywhere — tied as it is to traditional video subscriptions — is in programmers’ best interests: “We are not seeing evidence of cord-cutting, so why be part of something which isn’t happening?” he said at the conference, according to PaidContent. That echoes comments he made at The Cable Show (see Iger: Show Me a Model).

Other recent examples of the backlash against free-to-consumer media:

* David Simon, creator of HBO’s The Wire and a former Baltimore Sun reporter, urges the newspaper industry to start charging for the product on the Internet in an essay in the Columbia Journalism Review. Simon cites cable TV as the prime example of taking something “free” and turning it into a premium product:

The notion of Americans in 1975 being asked to pay a monthly bill for their television consumption would have seemed farcical. Yet in the ensuing thirty years, we have become a nation that shells out $60, $70, or $120 in monthly cable fees; indeed, whole vistas of programming exist free of advertising revenue, subsidized entirely by subscriptions. 

* The New Yorker’s Malcolm Gladwell, in a critique this month of the book “Free: The Future of a Radical Price” by Wired editor Chris Anderson, disputes the notion that the retail price of digital media will inevitably approach zero: “The only iron law here is the one too obvious to write a book about, which is that the digital age has so transformed the ways in which things are made and sold that there are no iron laws.”

Gladwell notes: “Broadcast television–the original practitioner of Free–is struggling. But premium cable, with its stiff monthly charges for specialty content, is doing just fine.”

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