Hulu Launches $9.99 Monthly Subscription Service

29 Jun, 2010 By: Stephanie Prange

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Hulu has launched its much-anticipated $9.99 subscription service under a “Plus” tab on its website.

The service, available via invite only, boasts all current season episodes of “Glee,” “The Office,” “House,” “Modern Family,” “30 Rock,” “Family Guy” and “Grey’s Anatomy,” among other shows.  It also offers multiple back seasons of current and cancelled shows. Ads still appear on episodes in the service.

The Hulu Plus service is available via computer and on Apple’s iPhone, iPad and iPod Touch and Samsung TVs and Blu-ray players. It will soon be available on Sony’s TVs and Blu-ray players, Vizio’s TVs and Blu-ray players, Sony’s PlayStation 3, and Microsoft’s Xbox 360.

Co-owned by The Walt Disney Co., NBC Universal and News Corp., Hulu for some time has come under pressure from its content owners to charge for its service, which until now has been free, supported by ads. The Hulu site still offers free, ad-supported recent episodes of shows.

The subscription service faces obstacles due to a consumer-base used to accessing free content, according to a recent study. According to the study, conducted by Santa Monica, Calif.-based research firm Interpret, Hulu and Netflix streamers have decidedly different interests — the former more apt to stream TV content, and the latter more likely to stream movie content (among Hulu-only streamers, 93% watch TV shows and 60% watch movies, compared with 68% and 87%, respectively, for Netflix-only streamers).

“The lead Hulu has established in streaming television is a blessing and a curse,” said Josh Bell, executive director of Interpret. “Hulu’s audience is conditioned to expect breadth of quality TV programming for free with limited commercial interruption, but reliance on network television programming puts them in a precarious position.”

Since its launch, Hulu has become a Web sensation with more than 40 million viewers in March watching 1.1 billion videos (2.6 hours per viewer), according to comScore.

The report, based on a survey of 9,000 consumers, found online TV streaming is primarily done to catch up on missed current episodes and that Hulu viewers are also more likely to visit ad-supported network sites to find missed episodes.

It said Hulu’s best chance at a subscription model hinges on diversifying its content to include newer movies, sports programming and premium cable networks, all of which consumers are accustomed to paying for.

“Ad-supported models will still work for certain stuff, but not for premium content,” said Edward Woo, media analyst with Wedbush Morgan Securities in Los Angeles. “Viewers may be hesitant when they have to pay for what was free. $10 might be too high for just TV shows.”

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