Hulu Announces $9.99 Subscription Service

Hulu, the popular online TV site, will put the bulk of its content behind a
pay wall. The move, announced by Hulu founder Jason Kilar in a June 29 blog
has been expected.

But it may also clear the way for CBS to begin providing content to Hulu.
Unlike its broadcast competitors ABC, NBC and Fox, CBS does not have an
ownership stake in Hulu. CBS also has its own internet service,

CBS Corp. executives have made it clear that they would not provide content
to Hulu if it remained free. Hulu's broadcast stakeholders have also been
disappointed in the paltry revenue generated by advertising on Hulu and have
pressured Hulu to begin generating more revenue. (Content partners get 70% of
ad revenue). Earlier this year, Viacom pulled popular Comedy Central programs The
Daily Show with Jon Stewart
and The Colbert Report from 

CBS Corp., Viacom and Time Warner are currently in talks about providing
their content to Hulu Plus. Bloomberg reported that CBS may begin providing its
content to the subscription service at the start of the new TV season in

Hulu Plus will offer current and past seasons of TV shows, including Modern
, Glee , The Office and Grey's Anatomy for $9.99
a month.

Past seasons of perennial favorites such as The X-Files, Buffy the
Vampire Slayer
and Arrested Development will also go behind the
pay-wall. will still exist as a free service, said Kilar. But the bulk
of the site's most popular content will be available only on Hulu Plus.

Hulu Plus will roll out in invite-only beta testing immediately via random
invitations to existing users. Users can also request an invitation
via the company's web site

Hulu Plus will be available immediately to subscribers with Samsung
Internet-connected TVs and Blu-ray players. (The Hulu Plus application can be
downloaded from the Samsung app store). The service is also available via Wi-Fi
or 3G on the Apple iPad, iPhone 3GS or iPhone 4 or third-generation iPod Touch.
The Hulu Plus app on the iPhone streams over 3G and Wi-Fi.

Eventually, Hulu Plus will be available on the PlayStation 3. But Kilar did
not specify a timetable for that roll out.

That Hulu Plus will immediately be
available on Samsung connected TVs and also eventually through the Playstation
game console is significant as the industry weighs the long-term impact of
IP-connected devices.  

To date, Hulu has kept its
ad-supported content off broadband-enabled TVs and other connected devices.
Cable programmers, including Viacom and Time Warner, have also left connectedTVs out of their "TV Everywhere" online on-demand programminginitiative, limiting it to computers, laptops and eventually mobile devices.

But there are signs that TVprogrammers' views on connected devices, which were a hot topic at lastJanuary's CES show, are changing as they become more popular with consumers.
ESPN recently struck a deal with Microsoft to make its ESPN3 broadband network available
through the Xbox 360 game console. Also, two technology vendors who work
closely with the cable industry, Clearleap and thePlatform, have both struck
deals to enable the delivery of cable programming to connected devices like
Roku's $80 set-top.

"We believe that any lasting solution to the challenge of making TV show
discovery and viewing dramatically easier has to work for all three of our
customers, and those are our end users, our advertisers, and our content
suppliers," wrote Kilar in his blog post. "With Hulu Plus, we believe we've met
that goal. For our end users, we're offering them the most convenient way to
access their favorite shows, on devices they love, in high definition, at a
fair price. For our advertisers, who allow us to keep our Hulu Plus price low
with the support of ad revenue, we offer one of the world's most effective
advertising platforms, with the ability to speak effectively to users across a
variety of devices, anywhere they happen to be. And finally, for our content
partners, we offer revenues that compensate them fairly for bearing the cost of
producing the shows we love."

Additional reporting by Glen Dickson.