Hulu Hoops TiVo and Rocks Roku

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Hulu Plus has fans in high places.

TiVo (Nasdaq: TIVO  ) and Roku will offer owners of their set-top boxes the ability to stream premium Hulu Plus content -- if they subscribe to the high-end service.

Folks pay $9.99 a month to watch a deeper selection of digital video than what is currently available in the free Hulu service. Hulu Plus also offers high-def streams and is available through a wider variety of devices.

Hulu is the Web-savvy initiative bankrolled by News Corp. (NYSE: NWS  ) , Disney (NYSE: DIS  ) , and General Electric's (NYSE: GE  ) majority-owned (for now) NBC Universal. It has been a refreshing surprise for big media, and is now second only to Google's (Nasdaq: GOOG  ) YouTube in terms of drawing an audience for online video.

However, Hulu Plus still has an uphill battle. Most couch potatoes will be perfectly fine with the free ad-supported offerings. It's also competing against high-end streaming services -- including Netflix (Nasdaq: NFLX  ) and Time Warner's (NYSE: TWX  ) HBO Go -- that are made available to traditional subscribers at no additional cost.

This doesn't mean that the Hulu consortium is wrong to broker these types of deals. When Netflix began offering streaming on PCs in 2007, it didn't seem like more than a niche offering. Netflix began brokering deal after deal to make it easier for consumers to hit up its digital catalog from their living rooms and now 9 million of its 15 million subscribers are taking Netflix up on its Web-served flicks.

This doesn't tackle the price point, which is going to be a deal-breaker. It's not even realistic for Hulu to partner with TiVo or even Netflix to offer the service as part of those subscription packages. As long as consumers see Hulu Plus as an additional cost, it can start streaming on your bedroom ceiling and you still wouldn't be likely to pay up.

Expanding its reach is good, but dramatically lowering its subscription prices or drumming up a different model would be better strategies.

Would you pay up for Hulu Plus? Share your thoughts in the comment box below.

Walt Disney and Google are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers recommendation. Walt Disney and Netflix are Motley Fool Stock Advisor selections. The Fool owns shares of Google. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Longtime Fool contributor Rick Munarriz thinks life is too short to not fly past unwanted commercials on TV. He does not own shares in any of the stocks in this article, except for Netflix and Disney. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (5) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 29, 2010, at 12:51 PM, caltex1nomad wrote:

    I get everything I need on Netflix with DVD's and Streaming, why pay an additional $9.99 for a lot of the same content. I haven't seen HULU plus but, I understand they still have commercials on some of the content.

  • Report this Comment On September 29, 2010, at 3:56 PM, PACandela wrote:

    It is wrong to say that HULU competes with Netflix. Two different products. Netflix is great if you want to watch previous seasons of a show. Let's say you have never seen "The Office". Netflix is great because you can watch the first couple of seasons online but the current season is not going to be available nor is last season unless you get Netflix to send you the DVDs. Now, let's say you are a big fan of the office, but you missed the last 3 or 4 eppisodes and want to get caught up. Hulu provides this service and if you pay for plus, you not only get thousands of TV shows not available in the free version, you can watch Hulu on an iPhone, iPad or even a Sony PS3 in HD. I do not see Hulu as competition for Netflix, but as competition for Apple TV who is charging .99 per show. Think of Hulu as the buffet and Apple TV as a la cart. As for commercials: Hulu provides shows with "limited comercial interuption." What this means is a one hour show will have about 5 commercials (spread throughout the show) lasting 15 - 30 seconds each. I currently subscribe to both Netflix and Hulu and find each of them to provide excellent service....and yes, because I am a gadget freak, I also have Apple TV.

  • Report this Comment On September 29, 2010, at 4:31 PM, ibankingcrooks wrote:

    The traditional broadcasters still don't get it. It's unfortunate that Hulu's owners can't seem to get on the same sheet of music: you must eat your own lunch before others do. Here is an idea - provide every show that Hulu's owners / backers have access to one week after it airs. That will actually get people to pay for Hulu Plus. Oh, but wait Jeff Zucker is too busy worrying about Boxee, or complaining about agreements with Apple. Make a decision owners: Either license your content in a way which online users will actually buy it - or let Apple sell it. And why would you care if Boxee or anyone lets your users see your content - especially if they are shelling out for it??? You guys have spent so much time worrying about protecting content you have ruined your chances at expanding/keeping viewership.

    Instead these guys will squander their opportunities away, until Netflix and others have so much critical mass that Hulu will simply no longer be a player in distribution. Hulu Owners: It's time to start looking at the glass half-full, not half-empty. Look at the opportunity. You can be a major player online delivery of your own content. If only you can accept it. Until the day this happens, if ever, investors should act accordingly.

  • Report this Comment On September 29, 2010, at 4:35 PM, ibankingcrooks wrote:

    Oh, and just in case NBC, ABC or Disney were to respond with the usual whine of: "Oh we can't! We would put our agreements with Comcast, Cox, TWC, etc at risk..." Give me a break. If you put the service in place - there is NO WAY those companies will pull your content. They already have huge issues of their own in attrition to online. They can't afford to devalue their service like that. And your advertisers will love it b/c they will just get more viewership both online and live....

  • Report this Comment On October 06, 2010, at 3:57 PM, nomdeweb wrote:

    Could see (if Hulu Plus "or" Netflix got direct streaming for lots of current TV) dropping Cable TV. $9/month versus $monthly too much for Cable is a good trade.

    Wouldn't drop Netflix for Hulu. We stream loads of films. Our queue for old films we missed, gems we had overlooked is 400+ - we don't care about the 28 day wait.

    Very happy with Tivo because I *do* still want current TV programs, but with auto season recording & to watch in my own time.

    If Netflix gets lots of current TV down the road, then Tivo is in trouble IMHO as we can watch via Xbox, PS3, etc. in our home.

    Bottom line - my beef is with the Cable Company choices & prices.

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