Hulu on the iPad? Not as Easy as it Sounds

In a recent interview, Hulu CEO Jason Kilar told technology reporter Om Malik that his company was “very bullish” on mobile, even going so far as to say “we will embrace every device.” That’s a funny statement, considering that the company has been touting that same sentiment for years but has yet to launch anything for mobile, be it an app or simply a mobile-ready streaming site.

Now, with the launch of the iPad just around the corner, the rumors of an iPhone/iPad Hulu app are rising up again. But there’s a bigger mobile web than just the one accessible via Apple products, and that may be what Hulu has its eye on now. “We don’t think about one device only,” Kilar said.

However, going mobile is going to be a challenge for Hulu. And it’s not as simple as re-encoding a few videos, no matter what you may have heard.

Problem A: Hulu’s Business Model Needs Work

The fact that Hulu exists at all is somewhat of an amazement. Through tenuous connections with major studios, the collaborative, experimental effort to bring streaming TV to web (and make it profitable) has managed to attract a number of users in the U.S. Although the audience size varies widely depending on who’s counting, the company has managed to become a household name thanks to eye-catching commercials on NBC featuring actors from the network’s top shows.

But there’s a problem facing Hulu: in-video advertising is, apparently, not as profitable as once hoped. In fact, it’s just too expensive, says Marc Ruxin, the Chief Innovation Officer for ad agency network McCann Worldgroup. Hulu has been aware of this problem, though, and has been hinting towards the launch of a subscription service, with News Corp. chairman Rupert Murdoch telling an investor conference last fall that the company, was looking at “adding subscription services and pay per view” options. Through the subscription model, Hulu could potentially generate enough revenue to keep the studios happy and maybe even encourage them to offer up more programming.

Unfortunately, the subscription model has yet to launch and the profits from video ads have been far too lean for some Hulu participants. Recently, for example, Viacom pulled two of the top shows – The Daily Show and the Colbert Report – from the site, claiming that they simply weren’t earning enough money via the advertising model currently in place. Viacom Inc. Chief Executive Officer Philippe Dauman said that “on the current economic model for Hulu, there’s just not much in it for us to continue at this time.”

And so the situation degrades.

So what is Hulu doing now? It’s trying to attract more viewers to its site with the launch of “If I Can Dream,” an original series that premiered earlier this month. The fact that they’re now making the foray into this sort of online programming is somewhat worrying. After all, if hit video webisodes alone made for a profitable service, then YouTube would have achieved profitability ages ago, instead of (maybe) getting there this year, five years post-launch. Let’s face it, original programming is a bonus for Hulu users, but it’s not going to take the place of hot shows like the now-departed Comedy Central fare.

Problem B: Will Apple Allow a Hulu App on the iPhone/iPad?

Another problem? Hulu has been planning to delay its iPhone app launch until a subscription model was in place, according to earlier reports. But with the biggest names pulling out, subscriptions could be a harder sell. Still, even if Hulu was able to make subscriptions happen, there are no guarantees that Apple would ever allow them into the iTunes store, especially considering they’re offering a competing product. (See: Google Voice banishment from the iPhone, for example).

Meanwhile, Hulu’s online site doesn’t work in the iPhone’s web browser because it was built in Flash. If Apple rejects the Hulu app from iTunes, the company’s other option is encoding all their site’s content in H.264 and make that available via HTML5, the new web language that offers streaming video sans plugin. Since this has already been done, a Hulu app could launch a player on the iPhone or iPad, if, of course, Apple allowed them to do so. If not, then a mobile site would have to be built in HTML5 – video controls, overall UI, advertisements and all. That’s no simple process.

What’s Hulu Doing Now?

So is this the plan Hulu has decided on now? It’s hard to know for sure. Like Apple, the company is incredibly secretive about their plans and product roadmap, often refusing to respond to calls and emails entirely, even to say “no comment.”

And yet, the Hulu iPhone app exists. We’ve spoken to someone who’s seen it…but that was ages ago. For all we know, iPhone/iPad app plans have since been scrapped to work on a new solution that works around any potential Apple restrictions. But sources inside Hulu have clammed up lately, meaning they’re either building something top, top secret…or perhaps nothing at all.

We hope it’s the former, because frankly, an iPad without Hulu is a sad, sad affair. But will we ever see a real app? At this point, we’re not holding our breath.

1 Comment

1. 

   Mark Hayes March 11, 2010 at 9:17 pm

   The above post from ReadWrite Web is spot on and it points to the short sightedness of Apple in not supporting Flash. A primary issue with HTML5, is the support for advertising. In addition, significant behavioral data is collected by instrumenting the Flash player. Much of this is difficult if not impossible to do in HTML5.

   In my opinion, iPad will drive significant market share without Flash. If the installed base numbers are solid, Hulu will figure out a way to support it, and so will other media properties dependent on Flash today.

   What are your thoughts?