Hulu Unveils Paid Service, Challenging Apple and Netflix

The next step in Hulu's plan to take over your brain (and the world) is here.

It's mobile. And they expect you to pay for it.

In a long-expected move, Hulu announced Tuesday a subscription-based plan, costing $9.99 a month. Here's what the company wants you to know about Hulu Plus:

  • Subscribers will get access to the full current season of most broadcast television shows, rather than just the last three to five episodes, which is common right now.
  • They'll also get the ability to watch movies and shows on the gizmo of their choice, including the iPhone, iPad, Xbox 360, and PlayStation 3.
  • Hulu isn't a competitor to paid cable television. At all. They swear.

The last bit is where the major drawbacks of Hulu Plus kick in. To make sure consumers don't drop their $50-or-more-per-month cable plan, no cable programming will be available. That means no It's Always Sunny in Philadelphia, Psych, or Burn Notice. (Or, if you're on the younger side, no Secret Life of the American Teenager or Greek.) Hulu Plus also won't have any news or sports content.

So if cable companies are emerging unscathed, who could be harmed by Hulu Plus? Netflix and Apple.

Netflix, which has been offering unlimited on-demand streams of some movies and TV shows to subscribers since January 2008, now has a major competitor in that realm. And right now, Hulu simply offers more TV options than Netflix. But the older service can still offer thousands of DVDs in the mail that Hulu never will, and it streams content at 1080p, walloping Hulu, which offers much of its content in 480p and only some in 720p. Over at Business Insider, they think Hulu actually won't be much of a threat to Netflix.

Hulu Plus increases the pressure on Apple to offer a subscription-based service of its own. One has long been rumored, and reports from last November indicated it would cost $30 a month, but exactly what content would be offered was unclear. For now, being able to watch full seasons of dozens of shows for $9.99 a month is going to be a lot cheaper than downloading those shows one by one from iTunes, at a few dollars apiece.

At the same time, Apple came out looking like a winner in the mobile arena. Hulu Plus will be available on iOS products, but there was nothing in the announcement about Android, Palm, or BlackBerry.

Speaking of mobile winners, AT&T and Verizon are looking shrewd. AT&T currently has a lock on the iPhone market and recently announced it will start charging customers based on the amount of data they use over a 3G signal—and that amount could skyrocket if Hulu Plus catches on. Verizon will be later to the game—it isn't expected to offer the iPhone until January and still hasn't officially announced it's dropping unlimited data plans yet—but it should start reaping the benefits soon enough.

If you're interested, Hulu Plus is launching on an invitation basis. You can sign up for one here.