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Google TV Puts Hurt on Hulu Plus

NEW YORK ( TheStreet) -- Google (GOOG - Get Report) TV and Hulu Plus are launching this fall, but that's about all the platform and content provider have in common as the future of Web video gets clearer.

Hulu Plus -- the subscription service launched by News Corp.'s (NWS - Get Report) Fox, GE's (GE - Get Report) NBC and Disney's (DIS - Get Report) ABC for their Hulu joint venture -- seemed like it was off to a good start. For $9.99, the service (still in its preview stage) has access to the full current season and past seasons of shows such as NBC's 30 Rock and The Office, Fox's Glee and canceled cult favorite Arrested Development and ABC's Grey's Anatomy and Modern Family. It is also available on Samsung TVs and Blu-Ray players, Sony's (SNE - Get Report) PlayStation 3 and Apple's (AAPL - Get Report) iPad, iPod Touch and iPhone -- with plans for expansion to more Sony products, Microsoft's Xbox 360, the Roku player and TiVo (TiVo) devices within the next year.

What it doesn't have is availability on Google TV, which is already home to streaming video from Hulu's main competitor, Netflix, for $1 less per month. Nor is it on Apple TV, which Netflix also counts among its lengthy list of platform partners.

"We've seen Netflix supported on a very wide array of platforms," says Ross Rubin, an analyst with NPD Group. "It's about as ubiquitous of a video service as you'll find, even though it involves paying a monthly fee."

Netflix can't offer the 780 million commercials and 30.2 ads per viewer that ComScore (SCOR) says Hulu averaged in August -- leading all Web video providers and beating the combined 28.3 ads-per-viewer average of all sites combined -- but it doesn't have to. While alluring to advertisers, Hulu's ads stand out like festering boils to consumers comparing its value and versatility with commercial-free Netflix, which exists on platforms Hulu covets. It's part of the reason Netflix is offered on the Xbox, PS3 and Nintendo Wii, Roku and TiVo devices, and products from Hitachi (HIT), LG, Pioneer, Philips (PHG), Samsung, Sanyo, Sansui, Toshiba, Yamaha, Vizio and Best Buy's (BBY) Insignia. Another part is Hulu's reluctance and refusal to allow its free service to be seen by users of those devices and Hulu Plus platforms such as the PS3, where original-recipe Hulu went dark just last year.

"Hulu was very aggressive in blocking access to its free ad-supported service back to the television," Rubin says. "Now that it has a subscription service, it seems to be opening the door wide because Hulu wants to build a subscription business, and part of the value is access to its content on a broad array of devices."

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