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Hulu to Offer Less for Free, Require Authentication, Say Reports

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That sound might be the gate crashing down on Hulu's open access to new broadcast content. According to a report in the New York Post, the online streaming destination will soon require viewers to authenticate their accounts, offering premium content only to those who have pay TV accounts.

While a sad move for many viewers, it's not all that surprising. Hulu's owners include NBCUniversal, Fox, and Disney-ABC, which not only want to receive more revenue for streamed content, but also want to satisfy pay TV companies that Hulu isn't a tool for cord-cutters.

Hulu co-owner Providence Equity Partners cashed out of the venture last week, which the Post reports was prompted by the upcoming authentication requirement.

While it's easy to understand the cable and satellite company's motivation for requiring authentication, it's hard to see it being effective. Cord-cutters and -shavers who have gotten by with online access and fewer bills are unlikely to return to the fold. More likely, this will cause a rise in casual piracy. Pay TV services could do themselves more good if they finally embraced a la carte pricing and gave consumers more choice for limited channels.

It will be interesting to see what authentication, if adopted, does to Hulu's ad business. Hulu is the online video ad leader, a position that it has occupied for years. According to March 2012, comScore rankings, Hulu streamed 1.8 billion ads that month alone. Certainly that would take a large hit following authentication.

In related news, NBC Sports will require authentication for online viewing of most London Olympics coverage. That could be the incentive many consumers need to sign in to an authentication service. We'll have to wait for viewing numbers after the event to see whether or not it's a success.

Hulu media relations declined to comment.

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