Hulu Finally Announces Subscription Plans: $10/Month To Still Get Advertisements

from the well-that's-comforting dept

Tue, Jun 29th 2010 1:38pm — Mike Masnick

As has been predicted and expected for quite some time, Hulu has finally announced its subscription plans. Let's start with the one thing they got right: unlike some newspaper paywalls and such, they're not technically putting the existing offerings behind this subscription wall. Technically, you can still use Hulu for free the same way you did in the past, but as I explain in a bit, this might not work out in practice. So what do you get for your $10 per month? Well, you get access to the latest full season of shows from ABC, NBC and Fox (co-owners of Hulu). Of course, this isn't exactly a benefit. It just means that, unlike currently, Hulu doesn't delete shows quite as quickly -- a point that had been annoying users of the site. What else do you get? Well, you still get the annoying pre-roll/mid-roll/post-roll commercials, so you're not paying to get rid of those. And... hmm... well, if you pay, Hulu is just slightly less obnoxious about trying to block you from accessing the content on a television (even with a perfectly legitimate setup).

That appears to be it. I'm trying to figure out who thought this was compelling. Basically, for $10/month, Hulu will be slightly less annoying to the average user by not deleting content during the season and maybe kinda sorta letting you access Hulu on your TV if you happen to use the "approved" equipment. Of course, you could also use a system that gets around Hulu's bizarre and pointless TV blocks just as easily, but we'll skip over that for now.

Looks like another lost opportunity. Hulu could have come up with real reasons to buy by actually adding value. Instead, it just focused on being slightly less annoying. Some might not see these as being all that different (doesn't it add value to be less annoying?). That's true, but there is a fundamental difference: anyone can be less annoying without getting people to pay for it. Any business should be striving to be less annoying all the time in their core product. When you set up your subscription service around "we'll be less annoying," you've now given yourself a perverse and dangerous set of incentives. You now have the incentive to be more annoying in your core product in a push to get people to sign up for the less annoying product. Effectively, it's nagware, which may work for some segment of the market, but is not about providing more positive value, but about minimizing negative value. That's not a growth strategy.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: business models, hulu, subscriptions, television
Companies: hulu

32 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Designerfx (profile), 29 Jun 2010 @ 1:51pm

welp
its not hulu's choice, it's who they're owned by.

we all knew hulu was going downhill, and so now it is. about freakin time for it to die, honestly, as sad as that is.

I'm really tired of people thinking that advertisements are some magic profit when nobody even wants them in the first place.
[ link to this | view in thread ]
Fletcher, 29 Jun 2010 @ 1:56pm

Hulu Threatens Sony
Hey Sony...Hulu is threatening to block your internet capable TVs unless your customers give them $10 a month. Are you going to take that?
[ link to this | view in thread ]
The Devil's Coachman (profile), 29 Jun 2010 @ 2:07pm

What a stupid bunch of money-grubbing sacks of monkey shit they turned out to be. Didn't take long, did it?. Next thing you know, they'll be selling your ass up the river on the privacy front, just like most of their bottom-feeding contemporaries. Guess I'll remove their bookmark now, before they find a new way to pimp me.
[ link to this | view in thread ]
Anonymous Coward, 29 Jun 2010 @ 2:16pm

Bye Bye
Never liked Hulu and I still do not have a reason to like Hulu. No value found here.
[ link to this | view in thread ]
Anonymous Coward, 29 Jun 2010 @ 2:20pm

I would pay for a subscription that drastically reduced the commercials and offered full access to every episode of the few shows I liked. That would make it worthwhile to cancel my cable, which charges a ton in exchange for hundreds of channels of garbage, and use Hulu, which carries the 3 or 4 shows I like that aren't already available under CC.

I won't pay for this. It's not a very good offering. I feel kind of sorry for Hulu, which is stuck between consumers who want a valuable offering, and trying to negotiate with studios who are determined to offer consumers less than ever. With studios pushing back on virtually everything, I wonder if there is any place left for places like Hulu.

I already stopped watching Hulu a while ago; they were forced to drop some shows I liked and started deleting episodes of House faster than I could watch them.
[ link to this | view in thread ]
anonymous, 29 Jun 2010 @ 2:44pm

First steps...
I suspect that this is the first step toward moving to a model where you can only access full episodes if you pay the monthly fee. I have no evidence for this, just a suspicion. I'll consider my suspicion verified if we see further restriction of content to those who don't pay the monthly fee until only an episode or two per show is available (and lagged from what's playing on 'normal' tv by several weeks or months).

It still shocks me that these guys don't realize that on demand television shows with targeted and relevant ads (that have their own intrinsic entertainment value) represents a situation that is superior to viewer, service provider, and advertiser!??!?!
[ link to this | view in thread ]
anonymous, 29 Jun 2010 @ 2:44pm

First steps...
I suspect that this is the first step toward moving to a model where you can only access full episodes if you pay the monthly fee. I have no evidence for this, just a suspicion. I'll consider my suspicion verified if we see further restriction of content to those who don't pay the monthly fee until only an episode or two per show is available (and lagged from what's playing on 'normal' tv by several weeks or months).

It still shocks me that these guys don't realize that on demand television shows with targeted and relevant ads (that have their own intrinsic entertainment value) represents a situation that is superior to viewer, service provider, and advertiser!??!?!
[ link to this | view in thread ]
ChurchHatesTucker (profile), 29 Jun 2010 @ 2:49pm

Re:
"I already stopped watching Hulu a while ago; they were forced to drop some shows I liked and started deleting episodes of House faster than I could watch them."

Same here. It's barely useable as it is.

Gee, if only there was some alternative that had less of an annoyance factor...
[ link to this | view in thread ]
JNomics (profile), 29 Jun 2010 @ 2:50pm

I'll happily pay the $10 but...
As to Hulu's plans to monetize their site further by charging a subscription fee, I say ok. I'll happily pay it, especially if it means that shows like Thr Daily Show and Colbert Report will be reintroduced to the service, as has been eluded to on Charlie Rose. Moreover, I don't own a television, so $10 doesn't feel like much considering the money I'm saving on not having cable.

Now, all of that said, they are missing an opportunity by not significantly upgrading the service they provide. Apple showed us what the market will pay for guaranteed product quality and thoughtful content organization.
This is the point of greatest opportunity for Hulu. While I doubt that much will be done to follow through on this promise given the networks they are in cooperation with, I will hope that the spark that birthed this innovative service will continue to direct it's course. The fee is only bad in relationship to the outcome we have yet to see. Moreover, what should we expect from a company (Hulu) that colludes with such perennial media behemoths. Not innovative. But not surprising.

JNOMICS
[ link to this | view in thread ]
Jeremy7600 (profile), 29 Jun 2010 @ 2:51pm

I won't pay for commercials
On some other sites where this has been mentioned, people equate the Hulu "pay for commercials" deal as similar to cable, except on cable they started out with no commercials. (Correct me if I'm wrong on that)

I won't pay for commercials, and if I only get access to this season of a show, I won't go for it. I loved it when it first came out, I didn't even know they had commercials (thanks to Adblock) until the started posting a marker to tell you to turn off adblocking software. These days Adblock doesn't block the ads anymore but I don't mind 30 seconds (or less) of commercials here and there, when the content is otherwise free of charge. The minute I start paying for TV again it better come without adverts.

Further, I can already output Hulu to my TV, for me its this technical innovation called an S-Video cable. It works brilliantly, since my PC is only 6 feet from the TV. Hulu's quality is not greater than what my TV can display, so it works. Is that cheating? I sure as hell hope not, cause there's nothing they can do to stop me from using my TV as a monitor.
[ link to this | view in thread ]
mrharrysan (profile), 29 Jun 2010 @ 2:54pm

Re: Re:
haha... TPB
[ link to this | view in thread ]
Anonymous Coward, 29 Jun 2010 @ 3:11pm

I would gladly pay $10 or even $20
if a few things were different ...

They need every episode of ever major broadcast network's shows, including every episode of canceled shows that were on the networks.
It needs to be commercial free, or at a minimum pre/post-roll only
They need to add discovery and history channel
[ link to this | view in thread ]
Anonymous Coward, 29 Jun 2010 @ 3:20pm

Re: Re: Re:
That is the point isn't it? Everything on TV, now or ever, foreign and domestic, nicely indexed, packaged in a relatively small downloadable package. Can't someone find a way to make this legal and affordable?
[ link to this | view in thread ]
crade (profile), 29 Jun 2010 @ 3:23pm

"Any business should be striving to be less annoying all the time in their core product. When you set up your subscription service around "we'll be less annoying," you've now given yourself a perverse and dangerous set of incentives. You now have the incentive to be more annoying in your core product in a push to get people to sign up for the less annoying product."

From my experience, this has been basically a fundamental shift in the software industry. The focus has been to ensure there is no competition and somehow trap users into being forced to pay for your product despite hating it rather than trying to entice users to stick with your product because it is the best.

Drives my crazy, because it makes me feel like the industry I have chosen as my career path is getting more and more dishonerable when looked at as a whole.
[ link to this | view in thread ]
Greg G, 29 Jun 2010 @ 3:25pm

No thanks, Hulu....
... I'll stick to torrents. No ads, no restrictions.
[ link to this | view in thread ]
Anonymous Coward, 29 Jun 2010 @ 3:42pm

Now if they'd just shed that pesky affiliation with Fox I might not cringe at the idea of giving them my money for what, in principle, should be 100% free anyway because of the forced advertisements.
[ link to this | view in thread ]
bob, 29 Jun 2010 @ 3:53pm

Well
It's back to the file lockers and BT for me.
[ link to this | view in thread ]
Dawger (profile), 29 Jun 2010 @ 4:38pm

$10
For $10 a month.... No way. I smell abject failure in the air.
[ link to this | view in thread ]
Valkor, 29 Jun 2010 @ 4:39pm

Re:
Demagogue much? Four legs good, two legs bad.
Go back to your commune.
[ link to this | view in thread ]
Anonymous Coward, 29 Jun 2010 @ 4:50pm

Finally
Ok, I've seen so many negative comments both here and on other news posts.

I for one am glad they're finally releasing this. I already cancelled my cable (~6 months ago) since everything I watch is on hulu anyway (I have about 50 subscriptions, granted probably 25 of those are (now) cancelled shows).

I already signed up to get an invite into Hulu Plus, but here's what I'm going to do. I'm going to watch the 4-5 shows they have the full back catalog for that I missed the jump on (Bones, The Office, maybe some X-Files), then cancel my sub until they get more shows I am not caught up on. I don't think I'll be alone in this either.

I would have preferred there to be no commercials, but I'm OK with this. Alternatively I could get Netflix and get the back seasons of these shows and keep normal Hulu for current episodes. Only problem with that is if I catch up on Netflix mid season (and episodes 1-x are off Hulu already, I'm screwed).

My computer is hooked up to my 52" HD Sony Bravia with a HDMI cable. I already watch Hulu on it and can't wait to get 720p as well (might be the only thing that gets me to keep Hulu Plus).

It's not all bad. It's not great either, but it's a start. Remember when Hulu first started, they had a crappy selection and few networks. They keep adding more (despite people saying they're removing content), especially a larger back catalog of many older shows.

The other thing I wish I got with Hulu Plus was faster access. I would love to get ALL my shows by midnight the day they aired, or worst case 10am the next morning. Instead it looks like I'll have to stick with downloading House/Some SGU/Some Burn Notice since I can't wait the 8-day lag they impose on them.
[ link to this | view in thread ]
trilobug, 29 Jun 2010 @ 5:00pm

Netflix is scaring the shit out of everyone.
Well I knew they were doing this but I though it would have to be something like $5 a month or $60 a year. This is too expensive for what they offer.

Netflix is a much better deal, not only is it cheaper but they have a bigger library, no commercials and rent DVD/Blu-Rays so you actually have access to HD content not a crappy stream.
[ link to this | view in thread ]
JEDIDIAH, 29 Jun 2010 @ 6:08pm

Targeted indeed...
After hearing about this today, I decided to mess around with Hulu again today to see how it might fit in with my own approach to TV. I was immediately confronted with a choice of what sort of spam I want for a particular thing that I will NEVER buy.

Not really an improvement I think.

They need much better "targeting".

Personally. I am still upset about the whole commercials on cable thing.
[ link to this | view in thread ]
JEDIDIDAH, 29 Jun 2010 @ 6:13pm

Adobe and their sandbagging
> My computer is hooked up to my 52" HD Sony Bravia with a
> HDMI cable. I already watch Hulu on it and can't wait to
> get 720p as well (might be the only thing that gets me to
> keep Hulu Plus).

...which brings me to another problem with web video in general. Most of it is trapped in one proprietary standard or another. It's either Flash or Silverlight. While Flash is more widely deployed, it is HORRIBLE at supporting modern PC hardware features. Even under Windows they took their sweet time.
[ link to this | view in thread ]
SeanG (profile), 29 Jun 2010 @ 8:25pm

Great idea
It's a great business plan. Provide a service that people want, but be as annoying as possible without driving them away. Then offer to be less annoying for money. I'm going to try that.
[ link to this | view in thread ]
ComputerAddict (profile), 30 Jun 2010 @ 5:25am

Hulu should just offer a plethora of options and let users decide, make each feature $5/mo and offer:

- Access to previous shows, And choice of long pre-roll commercial or short mid-roll
- Commercial Free
- HD access
- External Device Access
(I know a lot of people think you shouldn't charge for this, but Microsoft Does for Netflix, you need Xbox Live gold Account, and plenty of people pay $50/yr for that. So while I dont agree with it, it is proven that people will pay for it.)

I know there is probably a lot more options they could offer

And then offer deals, $1 off when you get 2 services, $3 off when you get 3 services, etc.

I'd Pay $8-9/mo for All access and commercial free
[ link to this | view in thread ]
Anonymous Coward, 30 Jun 2010 @ 5:50am

If they keep the adds, then need to have 1080p video, because they are definitely going to have to compete against Netflix streaming.
[ link to this | view in thread ]
jsl4980 (profile), 30 Jun 2010 @ 6:31am

I really like Hulu, they provide a lot of good shows in an easier to use package than rolling your own DVR. Customers wanted more episodes and Hulu wanted more money so this seems like a decent first step.

It's odd how angry all of the comments are, it's a step toward making Hulu a viable business. If this starts working well then they'll get more content. It's a hell of a lot cheaper than cable and right on par with Netflix. I'm looking forward to seeing what their future plans are.
[ link to this | view in thread ]
Anonymous Coward, 30 Jun 2010 @ 7:41am

LOL $10/month for local channel content you can get for free. Sounds like a horrrible idea and I will continue to have never visited the Hulu website.
[ link to this | view in thread ]
ChurchHatesTucker (profile), 30 Jun 2010 @ 8:36am

Re: Re: Re: Re:
"Everything on TV, now or ever, foreign and domestic, nicely indexed, packaged in a relatively small downloadable package. Can't someone find a way to make this legal and affordable?"

Yup. Easily.

Step 1, A torrent, released at the same time the episode begins airing. You'd scoop all the 'pirates' by at least an hour. Your torrent would have more seeders by virtue of being first mover, and thus be preferred, even if it was a couple megs larger.

Step 2, Monetize it with a few short hulu-style ads, and/or sell the 'bug' (the logo for the network in the corner) to advertisers on a per-act basis.

Step 3, Profit.
[ link to this | view in thread ]
Jay (profile), 30 Jun 2010 @ 9:04am

There's a few other choices than Hulu. As it stands, they could have been great and I like the very few ads that they had during a TV series. But I see no benefit to paying extra money to be able to watch a show that comes onto TV.

What's particularly egregious is the entire belief that hey, I have to suffer through painstaking programming errors that stop me from watching TV from my laptop.

I just go to another site that allows me to be able to do all of that without that extra hassle.
[ link to this | view in thread ]
vastrightwing, 30 Jun 2010 @ 9:16am

Summary
Pros:
1) adequate selection
2) adequate interface
3) adequate video quality

Cons:
1) Too expensive. $9/mo = $108/yr.
2) Too many/long ads.
3) CBS, HBO shows missing.
4) Nothing new or innovative.
5) Paid competition: Cable, Netflix, RedBox, local video store, iTunes, Amazon, many more.
6) Free competition: over the air, youtube, google video, torrents and more.
7) Works only on approved browsers.

Future cons:
If Comcast buys NBC, you can say goodbye to that network too.
[ link to this | view in thread ]
Bengie, 1 Jul 2010 @ 3:37pm

Optimistic
Hulu - $10 for the shows on TV
Cable - $40 for the shows on TV

I hope Hulu takes off so I can drop extended cable.
[ link to this | view in thread ]