NEW YORK ( TheStreet) -- Hulu is considering recasting itself as an online cable operator, the Wall Street Journal reports, citing people familiar with the matter.

Hulu, which is a joint venture of News Corp.'s ( NWSA) Fox entertainment, Walt Disney's ABC and NBC Universal, which was recently approved to be acquired by Comcast ( CMCSA) from General Electric ( GE), may broadcast TV and on-demand video content to subscribers via the Web.

The service would offer TV channel bundles similar to cable and satellite providers such as Comcast and Time Warner ( TWX).

As consumers ditch their cable subscriptions in favor of free online video content, Hulu management may transform its business model to benefit from the shift.

In efforts to create a new revenue stream and compete with its rival Internet video providers, the venture launched Hulu Plus in November.

CBS ( CBS) content can often be found for free on the network's Web site for a few days, or even weeks following the airing of an episode. Netflix ( NFLX) meanwhile charges a monthly fee for its in-depth movie and TV content offerings.

Now Hulu is considering retooling its business model to try to keep up with the ever-changing digital media landscape.

In the fourth quarter of 2010, the number of consumers ages 18 to 49 watching TV on a traditional set fell about 1.3% from a year earlier, Nielsen data shows.

As less consumers tune into traditional TV sets, the volume of Internet content viewing rises. In December, consumers in the U.S. watched nearly 3 billion videos on Web sites offering TV content, up 96% from the year earlier, according to comScore. Hulu saw the number of videos viewed double in that same period.

Now Hulu's management is in talks concerning its exclusive content agreements and restrictions, and is trying to figure out how much free content it should offer.

In addition, News Corp. and Disney are reportedly contemplating whether to wait a few weeks after a TV episode airs before making it available on Hulu for free, the Journal reports.

--Written by Theresa McCabe in Boston.

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