Hulu takes another jab at Netflix

The streaming-video site is lowering the price of its subscription service, undercutting its competitor's cheapest subscription.

By TheStreet Staff Nov 17, 2010 1:06PM

Credit: (© Paul Sakuma/AP)
Caption: Netflix DVDBy Jeanine Poggi, TheStreet

 

Hulu is issuing a new attack on Netflix (NFLX), lowering its subscription fee by $2.

 

The Internet video company, which is backed by General Electric (GE), NBC Universal, Walt Disney (DIS), News Corp. (NWSA) and private-equity firm Providence Equity Partners, is cutting prices on its Hulu Plus service to $7.99 from $9.99, making it $1 less than Netflix's cheapest subscription.

 

Users already subscribed to the service will receive a credit.

 

The latest move by Hulu is just another sign of the building competition Netflix faces in the movie rental market. While Netflix has all but obliterated the brick-and-mortar movie business, with Blockbuster filing for bankruptcy back in September and Movie Gallery liquidating its assets, the streaming business is still up for grabs.

Coinstar (CSTR), owner of Redbox DVD kiosks, is searching for a partner to enter the streaming market, and Apple (AAPL), Google (GOOG) and Amazon (AMZN) are all vying for a piece of the business. Post continues after video:

It's also suspected that Hulu is considering an initial public offering that could raise as much as $300 million. The company has been valued at about $2 billion.

 

Thus far, this competition seems not to have eaten away at Netflix's growth. In its third quarter, the company saw its subscriber base grow by 1.9 million, bringing its total to 16.9 million new users. This is a 90% surge from a little more than 1 million new users in the second quarter, and it marks the fourth consecutive quarter Netflix gained more than 1 million new subscribers.

 

Netflix acknowledges that it's turning from a DVD-by-mail company into a streaming business. The problem is that while it cornered the DVD-by-mail business, it's questionable whether it will hold the same dominance in streaming.

 

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33Comments
Nov 17, 2010 6:00PM
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I will stick with Netflix because their customer service is outstanding.  If there are issues they rectify them immediately, no questions asked.  My only gripe would be is that there is no CC on streamed videos, which I need for the British period movies, etc.

 

Also, many of the networks offer current viewing of there most popular programs so why pay Hulu.  The commercials on both are annoying but only 1 or 2 minutes, way better than cable.

Nov 17, 2010 5:26PM
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**** Hulu....30 days wait.  I can pirate for free
Nov 17, 2010 4:24PM
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If they were smart Netflix's competitors would offer subtitles or CC on all their streaming videos.  NF does not in spite of what you might have heard.  Not only that, but they have been jerking subscribers around who complain.  They've been making big promises but have yet to make good or to even appear to care.  I'd quit them in a minute.
Nov 17, 2010 3:39PM
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Plus Netflix simply has boatloads more content. And newer.
Nov 17, 2010 3:31PM
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There is one major flaw that I can see with streaming movies. If your customer has DSL or slower movies take a long time to load. I can't even watch long Hulu clips on DSL with out all the buffering.

 

Granted I don't know what kind of profit margin Netflix gets for each type of movie delivery, but I would think would want to tailor their product for a wide variety of customers.

Nov 17, 2010 6:02PM
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I've had some dead time at work recently and even from a T1 connection with 15megs up and down, the video feed coming from Hulu has been horrible.  Audio is there but video can't keep up.  I hadn't had this problem in the past, only the last month or so.  I don't have this problem at all with NetFlix. 
Nov 17, 2010 5:59PM
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wow these posts are all over the place so here is my two cents.

Hulu has no streaming probs. You may tho depending on if you have a shared bandwidth connection or some other anomoly. My rural area now has dsl ( i got three megs) and Hulu hasn't stopped or buffered once and I watched all thirteen episodes of Warehouse 13 last year as they came out. I even paused them one night and picked up where I left off the next night. Your experience with buffering could be your computer busy with auto-updating or bandwidth traffic or lots of other reasons. Blaming Hulu sounds like your opinion not a fact.

Hey I was just sure that modern movies and new releases were going to be available somehow on the internet, right? That's where technology is now so I thought, right? No not right. New releases will be available nowhere, so don't think you be streaming them. You'll still have to go to the theatre or wait for the dvd for those. No streaming anytime soon so don't blame Hulu for that either. It looks like its going to be a while before movie theatres are obsolete.

I don't care for the ads either so I'm with you on that one; last year you could click to the end of the ad to bypass it but at least there is a 'doesn't apply to me' link so i choose the ads i can stomach. I'd be happy filtering out the enzyte commercials that you can't do with comcast or satellite.

Netflix isn't that great in my estimation either. I don't care to trade usps mail to watch a movie. I'll wait on streaming.

Then again I don't watch or need to watch that much tv or movies so for me being able to watch on my schedule is great. Since I haven't had a single connection problem with Hulu in the two years I've been able to watch what I want on my schedule I'll take the below bashing as rumor.

Nov 17, 2010 4:35PM
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I have both Netflix and HuluPlus.

Having the same problem as someone else with my Hulu account. It is constantly stopping and buffering. Takes too long to watch even a 30 minute show. I don't have that problem with streaming videos through Netflix, so I don't think it's my connection.

Also, if Hulu is a pay service, why do I have to sit through so many commercials??

Both services have really crappy selections in my opinion.

Nov 17, 2010 4:32PM
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We had Hulu Plus for less than a month.   The service wasn't that great.   1.   It had commercials in it just like the desktop version.   That annoyed me streaming it to my new tv and iphone.    2.   It constantly stayed stuck.    3.   You couldn't see all the items you put on your subscriptions from the desktop version (ex. The Simpsons).    I will reconsider going back to it if they remove the commercials.    I mean who want to pay $9.99/month (now $7.99/month) for commercials.    I'll stick to Netflix and free hdtv.
Nov 17, 2010 3:42PM
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Hulu is a HORROR!

If you want to see what their idea of content is;take a look at the menu of free movies.

3 or 4 OK or classic, the rest GARBAGE.

When you scroll through the menu you'll see the same flick re-posted to make it look like there are a lot available.

AND craptastic TV swill is regurgitated for your nauseated viewing pleasure

Also, I'd rather get poked with a sharp stick than put one penny into that creep Murdock's pocket.

Nov 17, 2010 4:26PM
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I'm on the free Hulu site now and again.  I'm not much of a TV show watcher at home so I don't see the point in paying $7.99/mo just to have access to a boat load of TV shows.  As far as I know, Hulu offers some movies but no where near the selection that NetFlix has and none are new releases. 

 

What am I missing here???

 

 

Nov 17, 2010 3:56PM
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I welcome the day that Netflix drops the DVD by mail and just goes with the streaming. As it is now blockbuster movies are not available via streaming through Netflix. I would defitnately stay with nextflix if they were to go to strictly streaming. Netflix and my Tivo go hand and hand!
Nov 18, 2010 1:34PM
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America? Are you Asleep or What? The Chinese were incensed about our Monetizing the Debt. China stood to lose 400 billion in value on the US Debt they Hold. The timing of this is all telling. The Chinese were told they could buy GM at real deal! What the Chinese were not told is GM will fail in a huge way because of their inferior product and insanely high Labor Cost! The Chinese are gonna be Pizzed when they realize they bought a Turd! I hope the Chinese see through the ruse and stay away! Keep your Gold America!   
Nov 18, 2010 12:42PM
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Everyone is hyped up abou the GM IPO.  Jus goes to show that Greed is everywhere.  Does anyone remember that GM wiped out stockholders as well as bondholders (illegally) with the help of the Federal Governement who took a 60% + stake inthe Comany and gave the rest to the Unions.  WHY WOULD ANYONE TRUST THESE LIARS, CHEATS AND THIEVES.  Ifyou are going to play this stock just be sure you get out early enough and they can wipe out the next guy.  As for me, I would not touch thestock or purchase their products.  The jonly reason they actually showe any profit is because of curent accounting sleight of hand.  They still owe the Government a huge number and they are dumping the stock on the public to pay them back by using your 401K dollars and pensin funds and Banks(yes I said Banks) and foreign incestors.  IPO only went out to these entities and some peopel have their 401K and pension money in and don't even know it.

 

shame on you Jim Cramer and others who only look at the profit and NO INTEGRITY.  IT WILL BE SHORT LIVED BUT I GUESS THE TAXPAYETRS WILL PAY FOR THE COMING VOLT CAR FIASCO

Nov 18, 2010 12:15PM
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Volt is hype junk 30-40 mi than charge it with fossil fuels (coal to electric) the nissan goes 140 mi and charges it self and cost $10'000 less. This propped up POS company is a new scam from BIG government!!! Wake up America.
Nov 17, 2010 6:34PM
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We watch most of our programs on Hulu for free. We have a laptop with a HDMI cable hooked up to it and our flat screen TV. We do not pay for Hulu plus. The rest of the programs we get from the CBS website. Kind of silly to pay when when can do the same thing for free. We have not paid for cable in ages and that was a big headache worthy of getting rid of. We save ourselves approx. $60.00 a month. The drop in the cable bill has paid for the laptop, TV and HDMI cable in no time flat. Hulu updates all of the programs we are interested in and recommends others we may be interested in. We get a e-mail notification when they are ready everyday. We could not be more happy. We have not watched a single rerun since we started using Hulu.
Nov 17, 2010 5:28PM
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Question for Fozzie Bear?  4Netflix- Do I understand you right that you can get regular tv through this.  I have to have ABC so I get my favorite programs ( Greys Anatomy, Private Practice, Desperate Housewives and Brothers and Sisters, and Bachelor)  I also need American Idol which I think is on Fox.   Can you get these channels and how much is it a month?

Nov 17, 2010 5:27PM
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I just plain don't believe in paying to watch commercials. That's where HULU loses me. (BTW I don't have cable/sat either for the same reason).

HULU's content also really sucks. There is only one thing you can count on HULU for... being a day late and a dollar shot.

Nov 17, 2010 5:20PM
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There is a lot of new movies on Netflix I watched Alice in Wonderland and the Princess and the Frog the other day. STRZ- I think that's what it's called has an agreement with them. You have to look all the time because most of the good stuff is only available for a short time just like on the premium channels. Most older movies are always there.
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