Basically any commercial longer than 15 seconds gets actively avoided and discarded by my conscious mind and I make a point to avoid purchasing products advertised in this manner. The number of annoying commercials on TV is why I stopped watching years ago.

You want to make more money off of Hulu? Charge more for your commercials. As you add more commercials the economic value of these commercials tends to wane because of viewer fatigue when it comes to advertising.

TV commercials should be something special and regarded as valuable by companies, not a given for every piece of junk manufactured.

And who cares if 99% don’t pay, eventually if the industry would switch to this model, they would realize that again, TV eyeball are pretty much the only game in town and pony up whatever is necessary to get their 15 seconds of fame.

I believe this idea would improve the quality of consumer products released because it would become to expensive to put out crap like the richard simmons jump up and down tapes and the enzite commercials we were forced to endure at some point and time in our lives.

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Not directed at you, Dan, but I do want to note that it’s interesting when I suggest that $10 is not too much to pay for convenient content, some people think I’m nuts. But when I suggest that $499 is too much to pay for a device like the iPad that you then have to pay extra in order to get content delivered to, people think I just don’t get it. That in itself says a lot about how irrational we are when it comes to how we allocate our $.

And Chris, I agree with you. A straight up quadrupling of ads will be dangerous. Hulu has already tried to change the ad model, with limited success. We’ll see how far they can take their innovation as they ramp up the ad load.

I don’t see how Xbox LIVE subscriptions can be compared to Hulu subscriptions? If I want to play games on Xbox LIVE, I have only one option, to buy the service. If I want to watch TV shows, I have more than one option both online and on TV.

As for TiVo, it’s not more expensive, it pays for itself in less than two years. Buying a TiVo unit and paying for lifetime service costs less than a cable DVR. In less than two years time, you make back all the money you spent on TiVo since you are not paying $20 a month to rent a DVR and you start saving that money each month.

So I’d rather spend the money upfront, have a better user experience like you suggest, and save money less than two years later. The downside is that you have to spend the money up front, but it’s hard to argue with a better experience and saving money. More consumers don’t do this is probably due to the fact you have to spend the $500 all at once, but if you can, you save a lot of money on the long run.

What’s great about Hulu is that, unlike television, you can go straight to the content you want with a truly bare minimum of nuisance. No reason for anyone to bother looking for illegal content sources. Raise the nuisance level substantially and that may change. Hopefully Hulu will continue its innovation streak by introducing less intrusive forms of advertising.

1 – The cable model is not several $ a month per sub, it’s several pennies per network per month per sub. Only premium networks can get a few bucks a sub per month. I don’t see those channels participating in Hulu (HBO, Disney, etc).
2 – Netflix has nearly 8 million people a month who stream content for anywhere from $8 to $20 a month. Obviously, they get DVDs by mail as well, so it’s not a fair comparison. So let’s look at Xbox 360 memberships at $7 or $8 bucks a month. It buys you nothing other than the right to pay games online that you still have to spend $40 per game on. Yet more than 10 million people do it each month. Now, I’ll admit, four million subs for Hulu was assuming a year or two of marketing ramp to build out the value, but it’s not at all impossible.
3 – You’re right that Hulu won’t begin to satisfy you and about another 40% of the viewing population. But for the total population, as much as 70% of content viewed comes from broadcast channels (which by the way are available for free over the air, yet 85% of people pay for those channels from cable or satellite, another testament to people’s willingness to pay for what they value). In my opinion, I think Hulu’s largest customer base will be people who pay for Hulu on top of what they already pay to cable or satellite because they value convenience. This is the same way that iTunes makes a few hundred million on videos a year, renting/selling TV shows that you already pay for some other way. But a small subsection of the population, people who use basic cable and really only want to watch the major networks will see value in Hulu, too, and that’s what the two-tiered pricing will be designed to prevent.

BTW, I never mind people bringing their own experiences into the discussion, as you did, but I should warn you, as a TiVo subscriber, you are one of 1.6 million households who value video enough to pay for the most elegant (and expensive) way to get awesome control of your video. You are not typical (and probably don’t want to be) so your experience is not a good guide for what the other 99% of the population will do.

Not to mention, there is no chance that Hulu gets 4M paying subscribers a month. MLB.com has content people are actually willing to pay for and they don’t even have 1M subscribers, but Hulu is going to get 4x that? Never happen. Those numbers just aren’t realistic and can’t be used as it’s completely unrealistic.

“With this fabulous service, Hulu would be nearly as good as your $54-a-month cable service today.”

There is no way anyone can think any enhanced Hulu service will be like cable. 40% of all the season passes in my TiVo aren’t anywhere online, so how is an online service then as good as cable when I can’t get the shows at all? Not to mention, the quality of online video is no where near the HD video quality on cable.

Matt Carrasco’s lengthy comment is particularly appropriate on this note, certainly written from an industry perspective, but it sounds a note that I hear a lot when speaking to producers who sign the checks to make expensive shows. They can’t possibly afford to keep signing those checks if people begin to prefer a Hulu model — even a $10 a month Hulu model. So how does it break out in the future?

Imagine 10% of Hulu fans want to pay for more content on more devices. Let’s say that’s 4 million subs x $10 a month or $40 million a month or nearly $500 million a year. Then, by quadrupling the ad model, Hulu can get $400 million in ad revenue instead of $100 million like they did in 2009. Now we’re nearly talking about a billion dollar business. That’s far less than the $13 billion CBS brought in last year, for example, but it’s enough that Hulu can really contribute to the cash flow of the networks from whom it buys content. And that’s ultimately what will happen. Just like a cable company does, Hulu will start paying networks a fixed bit per month per subscriber along with a few-cent fee every time a show is streamed. Sounds a lot like a cable company, eh?