Is Hulu Waiting For Subscription Service Before Launching iPhone App?

Last week, multiple sources familiar with Hulu's video plans told me that Hulu already has an iPhone app ready to go, but won't launch it until Hulu rolls out a subscription-based service. While Hulu has hinted at such a service in the future, the company is still downplaying it as though it won't come anytime soon. That said, Hulu did say from day one that they will look at a combination of free and paid content offerings for their business, so the idea of a subscription service is not a new one. It's only a matter of when, not if.

While the iPhone does not support Flash video today, one of the sources I spoke with said Hulu has already converted some of their content over to H.264 for playback on the iPhone. However, they didn't know how much of Hulu's content had been converted and for all we know, the content that was converted could have been just for testing purposes. While Hulu is usually quick to downplay anything they might be working on, they do have an entire team working on new projects and offerings and have a section on their website called Hulu Labs.

Even if these sources are accurate, there's still a lot of hurdles Hulu has to get through to make an iPhone app a reality. For starters, it has to be approved by Apple (AAPL) which could see Hulu as a threat to iTunes. While I don't think they would and could probably use Hulu's iPhone app to push sales of download to own content, with Apple, you never know. The other big hurdle is whether or not AT&T (T) would allow Hulu streaming to the iPhone over 3G. Considering they won't allow services like Sling over 3G, it's possible that Hulu also only gets streaming over WiFi. But if Hulu was able to do some sort of revenue-sharing deal with AT&T, one could argue they may allow it.

No one knows for sure when a subscription-based service or iPhone app by Hulu will come to the market, but clearly Hulu is pretty far along with their plans for both. How much would you pay a month for a subscription to Hulu if the offering was better quality video to the PC, ideally HD, and the ability to get videos to the iPhone?

Comments

[brewer:]

Hulu isn't bad, but any service that doesn't work with iPod touch and iPhone are doomed, IMHO. Ditto for any subscription based service, though I would love to see this sort of thing replace Cable TV as we know it. The flash to H264 conversion can be done on the fly, like it does on Youtube. Flash is too inefficient and battery consuming to last longer than a few more years. And all the annoying banner ads are in Flash, it's best to turn it off.

Oct 15 04:49 PM

[brewer:]

I doubt too if Apple would have a problem with Hulu, they don't make much off of iTunes content anyway. Still by far the easiest way to get videos on your iPod though is by using the iTunes store, and the experience far exceeds streaming video.

It's simple. If you are streaming video, you are going to have issues or cause them for anyone else trying to use the network. Much better to have a file you can watch anytime, such as those provided at iTunes. iTunes has had renting capabilites for sometime now, where you can watch a video x number of times in x number of hours for much less than buying a copy of it (to be watched whenever you like).

Oct 15 04:53 PM

[Alejandro:]

Dan, is there a possibility that instead of streaming paid video for this Hulu app, shows could be ad-supported, and downloaded and be available for a certain period, similar to how Apple synchs rentable iTunes movies? Taking this path would place less stress on the 3G network, and it also would not compete as much with iTunes sales. The only catch is that you would also have to disable the fast-forward option, at least during commercial segments, but given that viewer engagement is higher in mobile video than online video, , which in turn is higher than television, CPMs would be fairly high so maybe ad-supported would work.

Oct 16 11:13 AM

[Dan Rayburn:]

Sure, it's possible, but I don't think likely as the consumer experience would suffer and the content would not be available instantly.

Oct 16 01:11 PM