Since Hulu launched early last year, its popularity has quadrupled as millions of people turn to the free online video site to watch episodes of such television shows as "Family Guy," "The Office" and "Modern Family."
Some wonder how long the free flow of online video would last if Comcast Corp. ends up a part owner of Hulu.
The nation's leading cable company has made no secret of its disdain for Hulu's approach of giving away the shows that Comcast and other pay-TV distributors spend billions for -- and rely on to retain subscribers. Comcast is in talks with NBC Universal about pooling their entertainment assets into a new company that would own 30% of Hulu in addition to the NBC network and cable channels such as Bravo, E! and Syfy. Comcast would control the new entity and possibly have the clout to push Hulu to begin charging for access to some of its most popular shows, including "It's Always Sunny in Philadelphia," "The Daily Show With Jon Stewart" or "Psych."
"Would Comcast put an end to the Hulu model of using the Web to distribute free TV content?" asked Michael Nathanson, senior media analyst at Sanford C. Bernstein & Co. "Will Comcast continue to support Hulu?"
Hulu, a partnership between NBC, Fox and Walt Disney Co., has been a nagging concern among Wall Street investors, who see the site not as a hedge against Internet piracy or viral video phenomenon YouTube but as a threat to the economic underpinnings of the television business. The $22 billion a year in cable and satellite TV subscriptions paid to programmers underwrites the high cost of producing all forms of television programming.
Hulu already has limited users' access to certain cable programs, including FX's "It's Always Sunny in Philadelphia," in response to an outcry from the television producers and cable companies that object to paying TV programmers hundreds of millions of dollars each year for shows that are offered free online.
Comcast Chief Executive Brian L. Roberts is among the cable executives who have made their concerns known to TV programmers, both privately and publicly. He and other cable executives fear that Hulu could become the free alternative to cable TV subscriptions.
"If I am any one of these programmers, not just ESPN, but the Food Network . . . and I have a business in that 50%, 60%, 70% of my business comes from subscriptions, I want to think long and hard before I just put that content out there for free and not think through what it is going to mean to my business," Roberts said at an investor conference in May.
