7 Ways Hulu Can Benefit From A Freemium Model

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This week I've been positing a theory to you folks: That the new creativity is ideally expressed through a freemium business model.

And today, I'd like to apply this theory. Let's kick this idea around:

I believe a freemium model would best suit video sites like Hulu and others, rather than a traditional "subscription" model where some content lies behind a firewall. A bunch of video sites like Hulu are looking to monetize, but who will find the process that entices viewers to pull out their wallets?

Today, I will outline 7 ways Hulu could package what they already have into a freemium model users would willingly pay for (clamor for, more like it).

[Quick sidenote: For the lead-in and first official post in this series, check out the links in the first paragraph. Since this is #2 out of 3 in the series, subscribe to ensure you receive the third in this series and all subsequent posts. Now, back to the fun!]

Let's See It In Action

If the new creativity is getting someone to tell their friends about your product, how much is a crappy ad going to convince me? Not much. And when was the last time you bragged to a friend about an old-school subscription?

The new creativity and the freemium model were made for each other.

Consumers tell their friends about great new services, especially free ones. As virally distributed critical mass builds, a certain fraction of those folks will opt for a premium version of that service.

The new creativity brings people in. A freemium model expands this audience and makes the whole endeavor profitable.

But what about Hulu? It's nowhere near as big as Google-owned YouTube, but Hulu almost certainly has more pressure to produce profit. Ad overlays are tolerated, but a subscription model was recently mocked by CNN because it "may send most of Hulu’s users searching for alternatives."

Consider this:

What if Hulu adopted a freemium model? What types of premiums could they offer for a small cost to a fraction of the tens of millions of people who watch?

And what if the premiums were outside the narrow realm of "content"? Ad Week reported that "A Hulu rep said the company's strategy of offering high-quality content supported by advertising remains unchanged, while leaving the door open to adding paid content." But what if it wasn't just content they charged for?

If the new creativity is a method of encouraging consumers to talk about the brand to other consumers, while creating more direct access to the brand…let's think creatively about how Hulu can create something users will not only pay for, but tell their friends about as well.

7 Ways Hulu Can Benefit From A Freemium Model

Here are just a few premiums Hulu could offer (most of which would have the secondary effect of attracting even more viewers/paid traffic). Let's consider what conveniences Hulu really has to bargain with, and how they could be packaged:

  • Access:

1. Give premium members advance notice. Allow members to view shows before the rest of the Hulu viewing audience.

2. Give members the opportunity to provide feedback. Use members to test out pilot episodes, to become a focus group of sorts. Use Hulu as a testing ground for new content such as webisodes, rather than just a repository. Let members help the show sidestep potential disasters while still in beta.

  • Convenience:

3. Allow members to automatically or easily transfer their favorite shows to their smart phone or portable device. Let users create a watch list and automatically pull episodes from the web portal into whatever device they choose. Compatibility is the new convenience, so allow me to take The Office with me on my iTouch or PSP.

  • Whuffie

4. Raffle off the name of a show's character to premium members . Aussie radio hosts Hamish and Andy recently teamed up with a popular writer to name one of his main characters after a lucky listener (minute 8 in the audio). It's a great idea to arouse support and build an audience.

5. Give away video birthday/anniversary wishes from the actors. Prominent actors in web-only shows, like Tony Hale from CTRL, give members a chance to interact on a closer level. Imagine while filming these short interviews if Hale had sent a personalized message to a winning member. A contest for this privilege would spread like wildfire considering his Arrested Development fame and it would cost the show nothing.

6. Allow members to create their own channel and earn cash. Ads still run if non-paying users watch a member’s channel. Allow the member to keep a small percentage of that income. That will fuel their desire to share the channel and push more content in front of users (allowing Hulu to charge more for ads).

  • Time

7. It should go without saying, but don’t make members watch commercials ever. Period.

Some Pessimism From The Back Pew

Some experts will disagree with me, saying that viewers will simply never pay for online content. I have quotes from some top agency minds saying just that.

But later this week, I will outline why they (and that mindset) are soooo wrong. Stay subscribed and please feel free to comment below. I'd love to hear your thoughts.

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(Image courtesy of AlphaTangoBravo / Adam Baker via Flickr)