I love a good discussion.

Some debate has been going on regarding Hulu’s new Plus service. Is it worth the money? Why not just do Netflix? There’s a healthy comment thread over on my original post which I’d recommend reading – good points made on all sides.

This morning Zach pointed me to an article titled “Did Hulu Just Make Its First Tactical Error?” Here is my response to that post and few thoughts to further the discussion.

What was the tactical error?

First, I’m not clear what tactical error the autor (Chad Catacchio) was referring to. So far as I can tell, he never came out and said it – it just seemed to be more of a comparison of Hulu Plus and Netflix. Which is fine, I’m just not sure what his point was other than saying he preferred Netflix.

Second, Chad focused a lot on the app versions of Netflix and Hulu Plus. I don’t think being able to watch the Hulu Plus content on an iPhone (which you can’t do with Netflix, by the way) was the big news or the reason for paying for the service. The big news was that there’s another big competitor to iTunes and the cable companies and it’s a subscription model.

Also, I don’t think Netflix is who should be afraid of the potential of Hulu Plus – I think the cable companies and iTunes (Apple) should be.

The real competition

The cable companies, as I mentioned before, are being ousted in their role of middleman as networks and movie studios are going straight to consumers via the web.

iTunes offers ala carte TV series which you can download and watch on your various devices – assuming you have an Apple device and assuming you’ve bought a $229 Apple TV so you can watch the content you paid for on your TV. This is a very expensive way to go.

Let’s look at a show I’ve been watching, Burn Notice. To purchase the current (fourth) season of Burn Notice in HD from the iTunes Store is $45. The third and second seasons are $35 each and the first season is a bargain-basement $20 (standard definition).

So if I recommend this show to you and you decide you want to check it out, you have to go back and spend $135 (plus the cost of an Apple TV) to catch up on one TV series.*

Media mindsets

Apple was right when they said people want to own their music. That’s because we’re used to buying it on tapes and discs and keeping it. Until recently we never owned TV shows – we watched them when they were on or we missed them and waited for repeats. That’s why a subscription service makes more sense for TV than it does for music or movies.

Apples to apples

And that may be the big point here: do you want to watch TV or movies? From my perspective, I pay my cable bill so I can watch TV. If I want movies, I do Netflix or Redbox; Netflix is about movies, Hulu is about TV.

In the end, you can get a subscription to Hulu Plus and Netflix and still save money if you cut your cable bill and only pay for Internet access. Bottom line is that these two companies signify a potentially huge shift in the way people consume media and that’s a good thing for consumers – even if it does cost $9.99 per month.

P.S. It is pretty ridiculous that they’re leaving the ads in Hulu Plus.

*Of course I pick a series that isn’t available on Hulu Plus. Figures.