http://www.digitaljournal.com/article/323986

NY Post: Hulu Axing Free Streaming

Posted May 1, 2012 by Tylor Sweeney
Hulu could axe the free streaming service that made them such a popular online destination in a move to appease cable companies.
Hulu Desktop Client for PCs and Macs.
Hulu.com
Hulu Desktop Client for PCs and Macs.
In what can only be called a daring move by the Internet television service, the New York Post is reporting that Hulu is in talks with Fox to axe the free streaming model that built the service and replace it with a model known as authentication. Authentication would require viewers to enter their cable or satellite TV account number in order to get access to Hulu's streaming library. This new access model would restrict access to Hulu's content to those who pay for cable or satellite television, blocking a surging number of "cord cutters" (i.e., people who have cancelled their cable or satellite subscriptions in favor of over-the-air television, online subscription services or a combination of these options) from using Hulu altogether.
Authentication on the scale being discussed is new for the online streaming service, but the authentication model is not. In order to access certain Fox shows next day, which is the typical wait time for content on Hulu, you must either be a Hulu Plus or Dish Network subscriber.
While the move may make fiscal sense for the cable companies, it doesn't make sense for Hulu. Hulu attracted 31 million unique visitors in March and made approximately $420 million in advertising revenue last year. Hulu's success has been built on the back of a well received, ad-supported free streaming model.
It is currently unclear whether the authentication model will affect Hulu Plus subscribers, as the subscription service is seen as a go-to option for "cord cutters." The Post was also unclear on the time frame for the adoption of this new model, although they did say that the transition, "could take years to complete."