Without Better Video Quality, Hulu's Subscription Service Won't Be Successful

It seems every few months the blogsphere gets all worked up whenever a report comes out saying that Hulu's going to offer a subscription based model. Frankly, I don't see why it continues to get so much press as we already know Hulu plans to offer a subscription service. The company has already confirmed that it has been part of their plans from day one. Until they actually release it in the market, how many times can you write about or speculate on the same topic?  While today's report from the LA Times says the price will be $9.95 a month, the real debate should be what kind of quality consumers expect when paying for online video.

Of course, for any subscription based service, the inventory of content that's available is important. But there is no way consumers are going to pay for content on Hulu unless the company offers a better level of video quality with the subscription. That may be their plan, offer HD quality and use that as an incentive for people to pay for a better experience. But if Hulu doesn't offer content in at least 720p, users aren't going to pay to get the same poor Hulu video quality that exists today. Hulu's encoding only supports up to 480p and full-screen does not look great. I always get lots of stuttering, pixelation in scenes with fast movement and quite a bit of buffering. As we've see with other successful subscription offerings like MLB.com or the NFL.com, content needs to encoded at 2+Mbps, be available in at least 720p HD quality, and provide a very good quality of service.

Unless Hulu plans to add at least 720p support for their subscription service and make the user experience much better, they have no shot at charging anything for access to their content.

Comments

[Matty C.]

you got that right. the quality of their videos is not great.

[Jacob]

Good post. I've been wanting to ditch cable for Hulu, but I won't do it until they offer more content with higher quality.

[HmmConvenient]

Let me be frank about this:

Everyone clamors for Hulu but all of their content is available over the air, on a DVR or on Cable VOD. Meanwhile, Netflix has been out there basically building the first operable "domain DRM" implementation making all of a users devices approved to received professional content.

Why would I pay to use Hulu on my PC or iPad only? Netflix is in my console, TV, PC, Roku, iPad, and soon iPhone.

[David H. Deans]

Dan, I'm a Netflix subscriber and I use the Roku player to stream video content to my TV. That said, I can't imagine that any informed consumer would subscribe to Hulu -- given the poor quality and the content choice.

Plus, I'd guess that most people who currently use Hulu view a very small subset of the available content on the site, and so a pay-per-view model would make more sense.

In contrast, once mainstream consumers discover the selection of high-quality TV content on Netflix -- such as TV series from the Starz and Showtime cable networks -- then that subscription model provides far better value for the money ($8 per month). Of course, the added bonus is all the free movies you can stream as well, and DVD rentals my mail.

IMHO, the adoption of a Hulu subscription offer is therefore limited by the size of that "currently uniformed" addressable market in the U.S. -- perhaps outside the U.S. market Hulu might gain more traction for their subscription offer.

[Christopher Levy]

Dan,

I disagree. 1. People who want Hulu will have to pay. I think they will in droves and of course Hulu will slowly ratchet up the quality.

2. HmmmConvenient...obviously a WideVine plant. Using FlashAcess, Hulu will be able to do the same thing and more. Isn't Blockbuster about to file for bankruptcy? Wasn't CinemaNow losing $5-$6M a year before they were folded? I know they were sold in a firesale.

[HmmConvenient]

@Christopher Levy:

I've been a longtime contributor to this site in the comments, much like yourself. Calling me a "Widevine plant" is foolish and ridiculous.

My point stands, unless Hulu gets into devices it isn't worth paying for. Given the friction with their content/ MSO parents I highly doubt they will be able to make a jump to the TV screen, instead being relegated to catchup viewing on other devices.

[Chum]

Dan, you cant be serious. Hulu's video quality is the best by far out there on the internet given its limited to 480p standard definition.

Netflix with all the support of gaming consoles looks horrible. Interlacing artificats, blockiness, and overall bluriness is all I see when watching a film over Netflix's streaming service on PS3 etc.

Yes Hulu's video quality should *improve for the subscription model, but I do not think the current free site has any of the quality problems that Netflix and others have, barring MLB's and NFL's HD streams.

I always watch Hulu and have no problems with buffering and stuttering, sounds like a problem with your internet connection.

So lets compare apples to apples, when and if Hulu supports 720p then you can say that the quality of Hulu's HD stream is sub-par. But to compare Hulu's 480p to other 720p offerings is not accurate.

[Dan Rayburn]

@Chum: We're not going to agree on this one. Netflix on the Roku and Xbox 360 is as good as it gets. Video is encoded at almost 4Mbps. Hulu doesn't even encode at half that.

You say I can't compare Hulu's 480p offering to Netflix's 720p offering because the quality is naturally different - that's my whole point. The quality of Hulu's video is not sufficient today for people to be willing to pay for it.

[andyg8180]

do i agree with you that people wont pay for it? no... should people pay for it? HECK no! the quality is ridiculously poor... netflix can stream a decent to high quality picture to a pretty low end PC while HULU can barely keep up... i honstly believe its the Flash technology they are using... Take EpixHD and their free 7day trial. They use the same type of technology as Hulu (except they have 2-4mbps qualy) STILL stutters and jerks like hulu does... netflix and Amazon VoD do not... oh, and they are on set top boxes and TVs

So i do agree with you that the service is farrrrr fromo $9 a month quality when you compare it to $9 from netflix... But, people will pay for it lol

[life insurance quotes]

agreed with Dan Rayburn

[martial arts]

Hulu's 480p offering to Netflix's 720p offering because the quality is naturally different ........sure about it

[BMD]

There are many competitor's to Hulu which offer much better quality of videos and are much cheaper than Hulu. Thus Hulu has to do lots of work to be able to survive in this tough market of Cinema.

[John In Buffalo]

I was a huge fan of Hulu for several years. Broadcast reception is not good where I live and I never even bothered to get equipment to pick it up after the switch to HD because I had started watching most of what I wanted to online. Hulu rocked in the early days. I didn't even mind watching the advertisements. Something is odd to me though and I would be interested to see if others have had the same observation. Hulu quality has degraded significantly in my location. Streaming TV shows on their site used to rock. Now they are pretty crappy. Lots of lag stutter and jerk. I wondered for a while if my internet connection had gone south but tried Netflix several months ago which works great on streaming vids so now I have other suspicions. Did Hulu downgrade their free streaming video for some reason? Did they do that to promote selling their subscription service? If so it didn't work with me. If Netflix will pick up more current TV series I enjoy I'll never look back.

[Mike TV]

It is always a matter of time. I think if a corporation has enough users, then it would be common sense to apply a charge.

[Steve Day, SVP - Marketing and Strategic Planning]

I think that the most important issue here is what was stated indirectly. Between the complaints about the subscription service, what you see is that people are really passionate about Hulu video quality. In other words, this post could have just as easily stated,"Hulu customers willing to pay monthly subscription if quality of video improves."