Hulu has already had quite a ride. In a few short years they have gone from a joke that nearly everyone said was doomed from the start, to become the second largest online video site in the US.
Since they launched, they have kept a steady focus on offering full-length TV episodes – and entire seasons and series in some cases – as well as clips, movie trailers and (limited) full-length movies – all for 100% free to anyone who visits the site. Today, however, Hulu lost some of that focus in an attempt to bring in more revenue with the announcement of Hulu Plus and I’m wondering: is it the right move?
Hulu Plus vs Netflix
First of all, let’s consider what a subscriber gets for $9.99 a month (assuming that when it launches for everyone it is basically the same as today). Basically, you’ll get to watch all of the TV shows that Hulu currently has in 720p HD, plus for most (maybe even all?) shows you’ll be able to watch the entire current season and perhaps the entire series as well on an number of different devices, including the iPad. Ok, that’s nice. Now, let’s compare it to the basic $8.99 plan on Netflix.
For $8.99 (plus taxes for both services) on Netflix, you get to rent one DVD at a time, plus you get Watch Instantly which gives you access to thousands of movies (many of which of course you’ll never waste your time watching) plus quite a few television shows (usually entire or nearly entire seasons and/or series), many of which are available in Netflix’s expanding HD content section (currently over 600 titles). Oh, and the quality of videos on Netflix’s iPad app – simply amazing (though I don’t really like the rest of the app).
So what does this mean? Well, let’s take me for example. I have the $8.99 plan on Netflix and regularly watch Hulu for free (especially from September to May when new/good TV show episodes appear). Over the last couple of years, I basically skip Hulu during the summer. Hulu is convenience, frankly – I could (almost) get all of the new shows I want to see by visiting ABC.com, NBC.com, Fox.com, etc. If I want DVDs though, my only real option is Redbox, and at $1 a day I would almost certainly pay more than $8.99 a month, and I wouldn’t get Watch Instantly.
Benefit of the doubt
So here we all are, trying to save every penny in this economy, and Hulu is telling us that we need to drop $10 a month (or $120 + taxes a year) to get what – get the iPad app and go from 480p to 720p, plus catch up on the more-than-5 episodes we’ve missed? Can that really be worth it?
To make a long story short – at $9.99 for what is currently offered, probably not, but Hulu has been doubted before, and maybe they deserve a chance to prove this is worth it – they’ve certainly earned that at least…
…however…
Another way perhaps?
I still think that there was a better way here for Hulu, especially regarding iOS devices. While I’m happy to see Hulu finally come to the iPhone/iPod Touch and especially the iPad (which is the only Apple product I own) as a from-day-one Hulu watcher, I frankly feel a little cheated that I can’t get the same free service on the iPad.
I understand that Hulu is a supreme balancing act between usage rights, platforms, etc and that they are probably restricted as to what they can bring to iOS devices, but there must have been a way around setting up this pay-wall. There certainly aren’t any technical hurtles to overcome, anymore at least, as well, there is an iOS app in the App Store right now.
Couldn’t they have just charged $9.99 for the app, kept the content free and been done with it? Maybe that wasn’t a big enough prize for them (though I bet they could get 3 million downloads easy at $10 a pop, which would be $30 million for an app that probably cost tens of thousands or at most a few hundred thousand dollars to make, so not too shabby of an ROI). They could then have charged more within the app for instance to watch a full season of a show.
But they didn’t, and now they’ve played their hand and are most likely going to have to stick with for awhile, whether it catches on or not. The future is certainly extremely bright for online streaming video, and in some form, Hulu is most likely going to stay a major player, but this move today could – could – end up being this very unlikely success story’s first major blunder.
At a more fundamental level, why should Hulu suddenly start charging for content on iPad/iPhone when it is free on a PC? Hulu’s tagline is “Watch your favorites. Anytime, for free”. Why should the medium decide the pricing? A paid app is OK, but this approach goes squarely against Hulu’s positioning.
I guess, Hulu is being guided by the usage habits of iPad/iPhone users. Just because consumers are using their iDevices for entertainment, does not mean that they will pay for anything you ask (well, may be some will still pay). As you rightly mentioned, I am not sure if it deserves the $10 pricing. Will wait and see, I am sure things will change :)
All true – as I said, as a long time user, I feel a little cheated by this announcement. However, from what I have heard, it’s at least partly a contractual thing with the studios – Hulu simply doesn’t have the rights to show (most if not all) of its content on the iPad/iPhone for free, so they needed to go the paid route. However, that’s why I think a paid app would have gotten them around that, because at least then they could tell the studios “Hey, here’s your cut of the app sales”. Again, that’s what I THINK is going on.
While looking forwardto trying this service out, the price is going to call for some serious thought.
Like the idea of paying once for an app. Id have even bought an iphone and ipad version.
Another downside is ads are retained. I could justify paying if ads were removed, but that doesn’t seemto be the case.
Yeah, I didn’t mentioned the ads because frankly I kind of doubt that will get out of the beta stage – people are going to be very vocal to Hulu that they don’t like that, and I’m pretty sure they’ll get the message. If not, well…
and this backs up a lot of this sentiment: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=131188
personally I think they are competing more with TiVo than they are NetFlix with Hulu Plus.
Think about it.. TiVo costs 12.95/month if you subscribe monthly. I know TiVo has a lifetime subscription option but many people I know who have TiVo do not have lifetime subscriptions. The two people I know who DO have lifetime subscriptions are sports fans who use it only to record sportting events (specials on ESPN, actual games, sports award shows, etc.) Thinking about it I would actually get Hulu Plus before getting TiVo because I dont like life time subscriptions to things. In my experience companies that offer life time subscriptions to a service want the customer to be out of sight out of mind and when there is hardware involved (as there is with TiVo) that send bad vibes to me!!
Interesting point about TiVo – however, unless Hulu is really going to get big into sports – they do offer some sports programming but it’s always after the fact and certainly nothing on the scale of cable – then I think that the sports angle alone separates them. However, still an interesting thought.
This was going to be a comment, now it’s a registration and log in fail. Can’t log in with twitter, nothing happens, created a profile, got 2 activation keys, first attempt didn’t seem to complete, now both just say “error.”
I’m “reechard” here there everywhere. for what it’s worth.
hmm, that’s odd and definitely not right. Will look into it.
Oh my that was strange. I think I’m logged in now, I was about to give up.
Anyway, I’ve been watching closely last 6 mos. for new stuff on Netflix WI and Hulu, and IMO there is not much new or interesting on Hulu, but Netflix WI scored Spartacus Blood and Sand and many other good shows. Party down season 2. A mess of really good films.
Not to say scoring content is easy to do, but if I were Hulu I’d not have spent the $ on that “If I can dream” “original” series. I guess they didn’t get the memo that most reality TV is a schadenfreude fest.
Ya know that really makes a lot of sense if you think about it. I think they know exactly what they are doing.
http://www.anon-surfing.at.tc
Like I said, they’ve surprised us all in the past, so hard to bet against them without giving Plus a shot first, so certainly holding off final judgement.
Not to be rude, but what was the tactical error? That point wasn’t clear to me.
I had a few more thoughts on your post (and Hulu Plus in general) which I blogged about here, if you’re interested: http://bit.ly/cA8OcB
Not rude at all – the tactical error (again, there is a question mark, I’m still willing to give them the benefit of the doubt) is to launch a $9.99 a month service that is less appealing (to me at least) than paying $8.99 a month for Netflix.