Hulu LLC, the website owned by three of the biggest U.S. broadcast networks, announced a paid service called Hulu Plus that provides the current and past seasons of programs on computers, cell phones and TV sets.
The service costs $9.99 a month and offers shows including “Grey’s Anatomy” and “The Office” from ABC, NBC and Fox, three of Hulu’s owners, on select Web-connected Samsung TVs and on Apple Inc.’s iPhone and iPad devices on Wi-Fi networks, the Los Angeles-based company said today on its website.
Hulu, which lets computer users watch previously broadcast shows for free and sells advertising, is making the paid service available on TV sets and mobile devices to draw bigger audiences and garner more revenue for its Internet programming. Hollywood studios are seeking new sources of revenue without upsetting relationships with cable and satellite TV providers.
“It’s a delicate balance between driving incremental revenue and disrupting an incredibly profitable, highly reliable revenue stream,” said David Bank, an analyst at RBC Capital Markets in New York. “You want to get incremental revenue from these new types of over-the-top services, but you don’t want to alienate your traditional distribution ecosystem.”
The service is designed to complement, not replace, a satellite or cable TV subscription, Jason Kilar, Hulu’s chief executive officer, said in an interview.
“Hulu Plus is something entirely different,” Kilar said. “It provides access in a convenient way to media, but it’s not a substitute.”
The closely held company said the service will be available soon on Sony Corp.’s PlayStation 3 video-game console and Bravia TVs, Microsoft Corp.’s Xbox 360 and Blu-ray players from Vizio.
The free version of Hulu will continue to provide the five most-recent episodes of shows such as “30 Rock” and “Family Guy,” the company said.
During the preview phase, Hulu Plus subscriptions will be offered by invitation only, according to the website. A version could be widely available in time for the September start of the new broadcast television season, Kilar said.
The company also is in talks to add shows from CBS Corp., Viacom Inc. and Time Warner Inc. to the website’s subscription service, people with direct knowledge of the discussions said.
“We have conversations with everyone all the time,” Kilar said. “Hulu Plus, in addition to Hulu, is an incredibly attractive thing if you’re a content owner looking for return on investment.”
Hulu was founded in 2007 by General Electric Co.’s NBC Universal and News Corp.’s Fox. Walt Disney Co.’s ABC and private-equity firm Providence Equity Partners Inc. are also investors.
Kilar said he sees a role for Hulu in cable and satellite-TV providers’ plans for TV Everywhere, a system that allows subscribers to watch shows online at no additional cost. Hulu could provide an easy way for customers of pay-TV companies to verify their subscribers, he said.
“Hulu has a lot of experience in this area,” Kilar said.