This may or may not go well for them, but Hulu knows what they're doing. They're very, very aware that doing this will drive away viewers. They probably have a pretty accurate estimate of exactly how many it will drive away, based on some extensive research. After all, subscription-content sites are not new. There's plenty of data out there for Hulu to check out before ultimately proceeding with something like this, and you can bet your bottom dollar that they have indeed checked it out.

I would imagine that their research shows that the subscription fees flowing from the remaining viewers will be greater than the advertising dollars previously earned from the larger crowd. Or perhaps they're bleeding money, and they think a subscription model would be better than putting in more and more ads, which would drive people away as surely as being forced to pay.

Or maybe it's neither of those things. The point is, this is a big company with analysts coming out the ears, and they're not changing their core business model on a whim. They've crunched the numbers and done the math, and they think it's a good idea. If we saw the data they've collected, we'd probably agree with them. Don't forget that popularity is a means to an end. Hulu is not "stupid," and is almost certainly making a perfectly reasonable business decision. Whether we like it or not.