Hulu's new Hulu Plus premium service has garnered praise, sure, but also criticism for continuing to show ads even to those who are already paying. Hulu Plus gives subscribers access to a larger back catalog of shows as well as the ability to watch them on mobile devices like the Apple iPhone—but retains ads. Services like Netflix that are, if not direct competitors, certainly in the same broad category, charge monthly fees but have no ads. How does Hulu feel about the reaction to its new service?
With the new service, a subscriber is essentially paying twice — once by paying for a subscription and once by watching advertisements in the video. When I asked Kilar to comment on the criticism being leveled at the company, he said that the company was comfortable with the idea of offering a higher-priced version if there is demand from customers.
Kilar noted the variety of services on TV, from subscription services like HBO to paid package content like basic cable to free broadcast networks—there's no reason to think web video wouldn't be similarly varied.
Would an even-pricier ad-free version of Hulu be successful? The $10 per month subscription fee for Hulu Plus is about as much as I think customers are willing to pay. Netflix, after all, is only $8.99 for unlimited streaming of a huge selection of movies and TV, and has no ads.