Two weeks ago, Hulu came out of the gate with open availability to its premium service. Hulu Plus boasted new content and a subscription price of $9.99 a month to watch television shows on demand.
On Wednesday, Hulu seemed to be embracing a new competitive reality. The company slashed the price of its streaming TV service by 20 percent. Phil Leigh, a senior analyst at Inside Digital Media, is hardly surprised. When Hulu rolled out the Plus service in early November, he was skeptical about the subscription model and its pricing.
With Hulu Plus subscriptions dropping from $9.99 to $7.99, it appears Leigh was correct, at least about the pricing. Time will tell if the subscription model pans out for the platform, which still offers a free streaming service without the premium content.
Toll Charge Ahead
"Consumers love the Information Highway, but they won't pay a toll every five miles," Leigh said. "The price that Hulu is going to have to offer depends on what content they get. It's a trade-off between monthly price and content. I would think that given the content they have now, they are going to have to go below $5. Netflix has a fallback position in the sense that you can get the DVDs in the postal mail."
Hulu seems to think $7.99 is the sweet spot. That puts Hulu one dollar below the standard Netflix subscription, but Netflix has hundreds of movies and, as Leigh mentioned, the traditional DVD mailing service. Hulu nonetheless is pressing on.
The subscription price lets consumers stream full current seasons and a library of back seasons of television shows from major networks, something Netflix doesn't yet match. Hulu subscribers who paid the $9.99 preview price will get a credit for the difference applied to their next bill.
"We're proud to offer consumers the best of current TV on their terms," said Jason Kilar, CEO of Hulu. "With Hulu Plus, it's now possible to watch any episode from the current season of watercooler shows like Glee, Modern Family, 30 Rock, and dozens more; whenever and wherever they want."
Beyond the Browser
With Hulu Plus, subscribers can also go beyond the browser on a Mac or PC. Hulu Plus opens the door to watching programs on a television set -- if viewers have a Samsung Internet-connected TV or a Blu-ray player. Viewers can download an application from the Samsung app store and stream Hulu Plus directly to the TV. Hulu Plus is also accessible on Wi-Fi and 3G devices like Apple's iPad, iPhone or third-generation iPod touch.
Over the past few weeks, Hulu Plus has added several titles, including new fall shows like Raising Hope, No Ordinary Family, and The Event, and back seasons of hit shows including Monk, Psych and Battlestar Galactica. Hulu Plus has also added new devices. Subscribers can now stream the service to Sony Bravia 2010 TVs.