Hulu Plus, Netflix ,and the Future of Online Advertising

Among its frequently asked questions, Hulu Plus includes "Why are there ads in Hulu Plus?" Hulu's frequently given answer reads, in part, "We have found that by including a modest ad load, we can keep the price for Hulu Plus under eight bucks, while still providing users with access to the most popular current season shows on the devices of their choice."

Those who aren't satisfied with the answer can climb into the Hulu discussions page, where complaints are registered in ALL CAPS. 

Hulu's official line on ads likely leaves many subscribers unsatisfied because the ads are a jarring contrast with the ad-free subscription content provided by Netflix, and for that matter, Pandora and Spotify.

Why, though, should we expect a paid subscription to fee us from commercial advertisements? Netflix, Pandora, and Spotify actually look like exceptions here, standing out against pre-web subscription media services. Broadcast TV stations and most cable channels that come with a cable or satellite subscription carry ads. So does satellite radio. And so do magazines. And don't forget that major daily newspapers, which carry a cover price, were so dependent on ad revenue for their survival that the decline in newspaper advertising revenues has driven many publishers into bankruptcy.

The easy answer to why Hulu includes ads with its paid subscriptions is that consumers are willing to pay for the service, even with ads. This, though, is not an answer that Hulu will include in its FAQ.

A more interesting question is what separates Hulu Plus from Netflix, Pandora, and Spotify. 

With its focus on new network and cable TV programming, Hulu's service is more like turning on a TV than is Netflix's service, which -- with its focus on movies and older TV content -- is more like popping in a DVD. For that reason, Hulu subscribers might be more willing to accept the television norm of ad breaks. 

Perhaps a better explanation is that while Netflix, Spotify, and Pandora were created by media outsiders, Hulu is owned by the corporate parents of NBC, FOX and ABC. These media titans are accustomed to selling ad time, and they benefited from the lessons learned by newspaper publishers, who were initially eager to put content online for free and have only recently begun wresting it back from spoiled audiences. 

In this sense, Hulu's ad-model is a stake in the ground for ad-supported TV content in its inevitable digital forms. As more content moves to and is consumed over the web, the prominence of old media organizations vis-a-vis  the new frontier of tech startups may determine whether consumers will continue to pay for ads online.

See? 3D Printers are Cool

I dropped into the Microsoft Store at a mall in suburban Chicago yesterday, which of course, looks and feels vaguely like an Apple Store. A key difference, which could have been a one-time-visit fluke, was that a sales rep kept asking me questions after I said I was just looking.

As in, "Are you looking for business or personal use?"

Neither. I just want to fold this laptop back and forth like on the commercial. And I'm kinda curious about the Microsoft Store.

Speaking of plastic replicates, Microsoft Stores across the country are demoing the Makerbot Replicator 2 3D printer. At the Woodfield Mall store, the machine sits inside a transparent case, where you can see it working, spitting out little plastic sharks. You can also handle the little sharks and a wrench and other products of the Makerbot.

With a sticker price of around $2,200, many, many more people will be trying to figure out what these machines are than will be buying them at the Microsoft Store. That's a big deal, though. Introducing 3D printing to consumers as something that really exists and can be seen and bought at the mall is a step on the road toward 3D printing being the disruptive communication technology that it can be.

And, hey, it also makes the Microsoft Store a place with something cool to check out.