Hulu Opens Toll Road
5:15 PM --
Hulu LLC finally came clean with news that it is previewing a new subscription form of the Internet video service that runs $9.99 per month, and will look to challenge Netflix Inc. (Nasdaq: NFLX)'s video streaming strategy by opening up access to a number of broadband-connected devices, including Apple Inc. (Nasdaq: AAPL)'s iPad, iPhone, and iPod Touch; the Sony Corp. (NYSE: SNE) Playstation 3; Microsoft Corp. (Nasdaq: MSFT)'s Xbox 360; and some select TVs and Blu-ray players.
Oh, and it'll still run on PCs… provided they aren't running software from Boxee and Hillcrest Labs . Hulu's still blocking those folks. (See Hulu Blocks Hillcrest Again .)
The offering, which would seem to be most attractive to so-called "cord-cutters" or people who are constantly on the go and can't go without access to the latest season of Glee, costs extra, but those that do pay will, interestingly enough, still have to sit through some ads. Here's how Hulu spins that one:
"Hulu Plus enables Hulu, for the first time, to extend its innovative and targeted ad platform across four screens, reaching Internet-connected users wherever they are."
So don't be too upset about having to watch some targeted ads. This, after all, is a privilege you'll be paying for. Might as well enjoy those ads from Nissan and Bud Light, which are joining the preview launch, which is available on an invitation-only basis early on.
In addition to the wider selection of devices, Hulu Plus is touting a larger library than the more limited free version, whose ad-only business model struggled to reach profitability. Its owners -- NBC Universal , News Corp. (NYSE: NWS), and Walt Disney Co. (NYSE: DIS) -- are now trying to figure out a way to expand the pie without upsetting their cable masters, which pay them handsome carriage affiliate fees. MSOs may balk if it looks as if they're giving it away for free.
But in addition to targeted ads and device support, Hulu Plus says it's about content, and more of it, though not every piece of TV content from its parents will be offered. At the start, Hulu Plus will play up access to "season passes" from current series such as 30 Rock or every episode made of Buffy the Vampire Slayer. Hulu says it's starting off Plus with 120 seasons and 2,000 episodes.
But will consumers think $9.99 is a fair price to pay for that value? Does Netflix still offer more? Further out, will cable operators play a part in this?
One possibility: It stands to reason that MSOs could join the party by offering Hulu Plus to their newly supported broadband-connected devices, and perhaps extend that to cable's traditional cable video-on-demand (VoD) platform, too. But how much would that cost? I'm guessing it will be far less than $9.99 per month and might be used to help expand the industry's TV Everywhere ambitions.
— Jeff Baumgartner, Site Editor, Light Reading Cable