According to David Lazarus, two million customers “cut the cord” in 2010, terminating their cable and satellite delivery services. In the economic downturn, many users “find it cheaper and easier to download their shows from Netflix and Hulu.” (Lazarus, David. “Cable Needs a La Carte Menu.” Los Angeles Times 26 Aug. 2011, sec. B: 1.)
As a result, in July 2011, Fox became the first broadcast network to restrict free access to its shows through Hulu, of which it is part owner.
In 2008, as a defense against internet piracy, NBC Universal and News Corp., owner of the Fox network, teamed up to launch Hulu. They were joined by Disney, the owner of ABC, in 2009. Hulu specialized in showing the newest of the participating network’s television shows along with classic broadcasts and some movies. In exchange, viewers watch commercials, just as they would have done on broadcast television. This free service can only be accessed by a computer connected to the internet.
Hulu+ subscription service was introduced in 2010 with expanded the offerings. For about $8 per month, users have unlimited to the season’s television programming, more movies, and the opportunity to stream content to a variety of devices including smart phones, tablet computers, and the new “smart TVs,” that is, television sets with integrated internet capabilities. There are still commercials on Hulu+, although there are fewer of them.
Although Fox benefited from advertising revenue from Hulu, the streaming service caused the network to miss out on lucrative cable and satellite subscription fees. This is why, starting in July 2011, most Hulu users must wait eight days to see new Fox content like Glee or The Simpsons. However, DISH network customers have been offered an “authentication” code” to unlock premium Hulu content, supposedly to reward them for maintaining their monthly satellite service even as they stream content via the internet. Hulu+ subscribers can also watch new Fox shows.