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Hulu Plus Plagued With Minuses

Hulu's subscription service works on the Xbox, PS3 and iPhone, but charges users $10 for commercials and less content than its competition.

BOSTON (TheStreet) -- Hulu's available on the PlayStation 3, Xbox 360, iPhone and iPad? Awesome. It costs $9.99 a month and still has commercials? Lame.

Hulu and its backers at

GE's

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NBC Universal,

Disney's

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ABC and

News Corp.'s

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Fox Entertainment deserve credit for attempting to monetize their popular streaming-video joint venture through the Hulu Plus subscription service. According to ComScore, Hulu users watched nearly 1.2 billion videos in May, accounting for 3.5% of all online video viewership and second only to

Google's

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YouTube.

Viewership numbers weren't enough to keep

Viacom

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from taking away two of Hulu's most popular offerings, Comedy Central's The

Daily Show With Jon Stewart

and

The Colbert Report

, in March after noting that "there is not much in it for us" without wholesale changes to Hulu's approach. Now Hulu backers are hoping that offering entire current seasons of shows like Fox's

Glee

and

Family Guy

and NBC's

30 Rock

and

The Office

in 720p high definition -- as well as the entire back catalog of other shows like Fox's

Arrested Development

and the WB's

Buffy the Vampire Slayer

-- will make fans want to pony up.

Bringing Hulu service to

Microsoft's

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Xbox and back to

Sony's

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PlayStation 3 -- whose users began receiving "this video is not available on your platform" messages last summer after having unfettered Hulu access -- is a step in the right direction, as is offering it on Vizio, Samsung and Sony products as well as

Apple's

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iPhone, iPad and iPod Touch. However, there are five reasons why Hulu Plus is a bad idea:

1. It costs $9.99 and still has commercials:

Way to go to the trough twice, Hulu. According to Nielsen, 66.3% of broadband users already pay for an ad-supported video service: It's called cable. You may know it the place where Hulu content from the USA Network, SyFy, Bravo, Versus and other channels appears first. Hulu viewers have been willing to suffer two to three 15- to 30-second ads to catch up on their favorite shows for free, but when you start talking about paying for catalog content, there's a cheaper, commercial-free alternative in our second point ...

2. Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report streams for less without commercials:

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Hulu has the edge in current-season content, but Hulu catalog titles like

Buffy

,

Arrested Development

,

Rescue Me

,

The Office

,

30 Rock

and

Heroes

are already streaming on Netflix in HD and without ad interruptions. Netflix also offers some current-season offerings like Starz's

Party Down

and

Spartacus: Blood and Sand

and TNT's

Leverage

along with its formidable collection of streaming movies. Plus, Netflix streams on all of Hulu Plus' targeted devices

plus

Nintendo's

Wii,

LG

HDTVs and Blu-ray players, Google Android devices, Microsoft Windows phones,

Philips

Blu-ray players,

Panasonic

Blu-ray players,

Best Buy's

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Insignia Blu-ray players, TiVo digital-video recorders, Roku's player, Boxee, et al. -- all for $1 a month less than Hulu's offering. But Hulu's device compatibility matters less when ...

3. It exploits Xbox Live and PlayStation Network, which clamored for Hulu:

Game-console users didn't have a problem with Hulu's offerings, just its restrictions. When PS3 users got the black screen of death from Hulu last summer, some of them joined Xbox 360 and Wii owners with Windows PCs and paid for services like MediaMall's PlayOn, which sends streaming content from PCs to other devices via a home wireless network. PlayOn customers pay $40 for their first year of service and $20 each year thereafter, so it naturally seemed like a good idea for Hulu to triple that year 1 price. Plus ...

4. Customers are paying for bad buffering:

There are things you're willing to let slide when they're free, and Hulu's fits-and-starts on even a strong fiber-optic connection can test a user's patience. When you double those headaches on a DSL, weak Wi-Fi or even 3G connection, Hulu Plus is an unwatchably bad investment at $120 a year. Plus, it's a big drain on even

AT&T's high-end $25 data plan with its two-gigabyte cap

-- which equates to roughly a half-dozen one-hour episodes or about two of those episodes in HD. The temerity of charging people for Hulu Plus' technical limitations worsens when you consider that ...

5. There's still no content from CBS, HBO, Showtime, ESPN, TNT, et al.:

Even if Hulu Plus succeeds in culling the 3.9% of the population that Nielsen says has cut the cord with cable and gone strictly broadband, those users are still missing huge chunks of first-run programming they'll have to pay for elsewhere. Combined, Hulu, Netflix and services like the ESPN offered through Xbox Live represent huge savings over cable at $285 a year, but Hulu Plus' technical, content and platform limitations still make it a weak link -- and a bad buy.

-- Written by Jason Notte in Boston.

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Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, The Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.