Hulu's long-rumored iPhone app has come to fruition with the launch of its premium Hulu Plus service, which also extends to the iPad and iPod touch. Could this be the step that finally propels mobile TV into the mainstream (while getting users to pay $9.99 a month for the privilege)?
A big part of the Hulu Plus strategy is to make content available not just on Apple devices but a wide range of screens and machines. That includes mobile phones, PCs, Samsung and Sony Internet-connected TVs and Blue-Ray players, gaming consoles including the Xbox 360, and Sony PlayStation as well as tablet computers.
But the iPhone and other Apple devices would seem to be the proving ground for Hulu Plus on mobile gadgets because of their large installed base, media-centric features and convenient payment system via iTunes. But early reaction to the Hulu Plus app reflected in user comments and ratings on its App Store page underscore how difficult it can be for content providers to switch from a free to a paid model.
The free Hulu Plus app debuting in the App Store provides only a limited preview of the full service, offering episodes from hundreds of current and older shows from "30 Rock" and "Family Guy" to "The X-Files." Subscriptions are being offered initially by invitation-only online so the service can be scaled gradually without degrading quality.
But based on 1,438 ratings in the App Store as of Wednesday, Hulu Plus has an average rating of 1.5 out of five stars. The customer reviews posted suggest that people are especially irked by having to sit through ads on top of paying $9.99 a month. Hulu Plus will run as many ads as the free version of Hulu does. Here's a sampling of comments accompanying the ratings:
"What idiot would pay $10 bucks a month to watch ads."
"Ads + subscription fee=cable=fail."
"I can stream live TV via Slingbox for a one-time fee of $30 a month. I will never get an iPhone app that requires a monthly subscription."
"You either charge a subscription, or you make money with ads. Not both. Would make sense to offer an ad version and charge $10/month to remove them."
There's a lot more feedback in a similar vein, which doesn't bode well for converting Hulu users to paid customers on any type of device. Hulu's owners -- NBC Universal, News Corp. and Walt Disney Co. -- aren't taking the same approach as publishers launching new subscription-based iPad editions that also include advertising. News Corp. itself is extending its dual subscription and ad-based model for The Wall Street Journal to the iPhone and iPad.
The dual-revenue model, as expressed in an equation above, is also a bedrock business principle of the cable industry. But having operated Hulu for the last few years as a free, ad-supported service, it's that much harder to convince consumers that paying in addition to watching commercials is worthwhile. Mobile users are used to paying extra for video, or getting ads -- but not both.
Netflix, for instance, which introduced an iPad app in April, charges $8.99 a month for its streaming service, but doesn't run ads against content. TV shows downloaded via iTunes don't carry ads either. So combining payment and ads could be especially tough for Hulu Plus.
Forrester analyst James McQuivey argued in a blog post in April that the additional content users would get with the premium version of Hulu, along with more control over when and where to access it from multiple devices, would make it worth paying for.
"Despite whatever knee-jerk reactions viewers have to the idea of paying for Hulu content, it's the convenient access to Hulu content they're really being asked to pay for," he wrote. "My money says they will gladly pay for that as they always have in the past."Well, the knee-jerk reactions -- if they can be called that -- to Hulu Plus are certainly rolling out in the App Store. Whether they amount to short-lived grumbling or reflect deeper resistance to paying for Hulu on top of ads will become clearer in the coming weeks and months. But for now it looks more as if people have serious gripes with Hulu Plus.