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Hulu's tug of war with TV

COMPANY TOWN

As online TV viewership surges, media companies reconsider the wisdom of sharing their content for free.

May 11, 2009|Dawn C. Chmielewski and Meg James

Even the cable channels owned by Fox and NBC have been stingy about what they provide on Hulu. Just five episodes of cable shows like "Psych" on NBC Universal's USA Network or "Dog Whisperer" on Fox's National Geographic channel appear on the site -- usually a week after their initial television run.

Fox and NBC say there is little evidence that people are canceling their cable subscriptions because of Hulu. They contend that making shows available online provides valuable publicity, which stokes viewership on TV.


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Nonetheless, the two media companies are discussing ways to adapt Hulu to preserve their relationships with cable operators, whose carriage fees help underwrite the cable networks' programming. Operators have another incentive to come to the table: They want to keep customers signed up for their high-speed Internet service, which people need to watch shows online.

NBC Universal and News Corp. are considering whether to adopt a cable industry initiative called authentication, which would require users to prove they are pay TV subscribers before they can watch current shows on Hulu.

The partners also are discussing setting up a tiered system for online video, with some shows available for free -- such as prime-time network offerings -- while others would be reserved for existing cable TV subscribers.

"Everyone is coalescing around a central area -- authentication," said Tony Vinciquerra, chief of Fox's television networks. "If we can move this in the right direction, it will be something relatively seamless to the consumer, and good for business overall."

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dawn.chmielewski@latimes.com

meg.james@latimes.com

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(BEGIN TEXT OF INFOBOX)

What's Hulu?

An online service that allows viewers to watch television shows on their computers free of charge.

Owners: NBC Universal,

News Corp., Providence Equity Partners and soon, Walt Disney Co.

Launched: March 2008

Number of shows: 800

Number of advertisers: 200

Number of users: 42 million

in March

Distribution: On Hulu.com and 35 other websites, including AOL, IMDb, MSN, MySpace and Yahoo

Availability: Broadcast television shows can be watched a day after airing; cable TV shows usually appear a week later.

Source: Times research

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