A big issue here is media companies framing content existing online and off as a “conflict.” From a consumer point of view, these are two very different channels. Hulu erecting a pay wall will likely just lead to less people watching Hulu, not more people watching TV. Friends of mine are planning to buy a DVR now that Hulu may charge–that doesn't sound like the outcome the pay-for-content advocates are going for. But it is the reality. Young people are Hulu's largest demographic, and they have college loans, rent to think about along with low paying jobs. On top of cable and internet, how much more money can they really spend on entertainment? Bottom line, they probably won't pay for Hulu.

I wrote a short piece on this topic if you’re interested in reading more: http://www.thenextgreatgeneration.com/2009/11/16/hulu-gonna-buy/

Jason