Ditch cable for Netflix, Hulu for only $19/month?

"This will be disruptive to the existing distribution ecosystem"

Netflix and Hulu
Stream Away: Netflix and Hulu only $22/month
Netflix and Hulu
Stream Away: Netflix and Hulu only $22/month

Is Netflix ($8.99 unlimited streaming) and Hulu ($9.99) the killer business model for next generation streaming content?

“This will be disruptive to the existing distribution ecosystem,” stated Hulu CEO Jason Kilar in an update on the streaming video’s business model. “Significant value will be created.”

Prescient words.

If 2010 was merely a warm-up act (Hulu now has 30 million users), then 2011 could mark the year cable and satellite companies get slammed by the new prime-time: the Internet. Prediction? In the words of Mr. T., “PAIN!

Some days, basking in nostalgia, I look up to our satellite dish on the corner of our home. It sits unused. Soon, I’m sure the rust will come. Maybe I should volunteer it for extraterrestrial research.

“The ads on Hulu are 55% more effective than the same ads in traditional channels.”

I’m probably just one of many that are gradually making the move to Internet-based services. At first it was PlayOn for the PS3. Then Netflix released its App which I’ve found so far stellar for streaming movies, documentaries and television shows. Hulu (and Hulu Plus) continue to go gang-busters, and now counts over 350 advertisers on its burgeoning service.

Which got me to thinking.

The cheapest service Dish Network offers is $40/month. Netflix and Hulu, however, can be had for a combined $19/month and you get access to far more movies, all of it on-demand. Granted, live sports are a challenge, as is local news programming. But with the new MLB and NHL apps for PS3, for example, that too appears to be changing. Plus, factor in the added benefit of being able to stream content across multiple devices — iPad, iPhone, desktop, laptop, etc. — and the convenience is undeniable.

And there is a lot of choice out there: Apple TV, Roku, Google TV, Boxee.

Chances are, the landscape for TV over the next 5-10 years is not going to be dominated by names like Dish Network, Comcast or DIRECTV.

However, it’s probably too early to completely write-off traditional broadcast media.

There are licensing issues, apprehensive networks who don’t want to see a repeat of what Apple did with iTunes to the music industry, and long-term the new business models have yet to prove they are sustainable (e.g. can Hulu scale and turn a profit?).

Also, Dish Network just turned in a strong quarter, tripling profits y/y to $245 million.

Ultimately content is king. If consumers can’t get Glee where, when they want it, they’ll look for alternatives. As long as the new streaming video services can provide the same programming, for less money, with more convenience, then let the disruption begin.

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  • Chris G

    Is Netflix going up in price? I still get unlimited streaming for only 8.99 plus tax.

    But yes, cable tv is dead by this combo. We threw them out in December 09 and I can’t tell you enough how it made me wish I’d done it years before.

    Hulu I could personally do without, but i bet my wife will go for it.

    The other point, basic cable must be offered for about $20. I bet if you check with the company that services you, you can get a basic package of around 45 channels for $17 or so.

    As for local programming, a simple HD antenna will cover your needs. I am about 40 miles from most of the transmitters and I get about 39 channels free over the air for the price of my $30 antenna at radio shack.

    also, no comments on the t2i/new lens post?

    • Thanks Chris. You’re right about price. I’ve updated article. You can get unlimited Netflix streaming for $8.99 per month. I originally quoted $10.99 which includes optional Blu-Ray, which many want won’t or need anyways. I find the Netflix HD streaming to be impressive. Rumor has it they will soon unveil streaming-only plans.

      Entry Dish package is $24.99 – but that’s introductory, it’s $39.99 after that.

      As long as we can get The Office, some CNN, Glee (for Loni!), and movies, we’re peachy.

      BTW – you could always be first to leave a comment on T2i ;-)

      • Chris G

        Doesnt seem to be a place to add a comment over on the t2i posting.

        But i was wondering if the thought of upgrading in the future should limit your field of choices for this cam. It was one of your t2i postings in August or so that I found your blog.

        As to netflix, you get hd streaming on the 10,99 plan that isnt normally there? Interesting.

        • Comments back on for the T2i article!

          Not sure if I’m reading you right on the upgrade point. A long day at work. I’m hoping T2i will give us at least 2 years before upgrade needed Famous last words.

          Yes I have $10.99 plan (with Blu-Ray)… maybe grandfathered plan? Not sure – the streaming video market is moving really fast.

  • Curt

    I am on the verge of making the switch. The fact that all content is on-demand is huge for me. My only hold back is getting Hulu on my TV. There are some options, but short of buying a $340 blu-ray player (I just bought a $239 Sumsung unit that doesn’t support it) I feel my best option is using Windows Media Center. Any thoughts?

    • Alex

      Many flat screen TVs offer VGA input.  I use a laptop plugged to my big screen to view all the streaming HULU and Netflix content I want.

      • Asssd

        Same here I do that it works great

  • This still comes out to almost $250 per year to watch commercial laden programming. This stuff should be free if they’re going to load commercials into everything they broadcast. Just follow the successful Google model. You can get great TV programming from online services like TVDevo.com .
    Yes, they have commercials too, but at least there’s no recurring monthly bill.

  • Bob Hunter

    Stay away from TVDevo.com. They spam just about any article/blog post related to Internet TV. They’re basically selling you a Sopcast type program.

    • GZ

      Can you elaborate Bob? TV Devo is offering $27 intro one-time fee. Are you specifically talking about their spammy advertising tactics or their service? Do you own the service?

      • mrsleep

        I went to TVDevo.com, checked it out.
        The amateur quality of the site was red flag number one. When trying to leave the site, multiple pop-ups, red flag  number two. Confusing language in the pop-ups to get you to click the wrong thing, red flag number 3.
        The obviously canned responses on multiple articles about streaming, red flag number 4.
        The whole thing reeks of scam.
        I also find it hard to believe they can afford to aquire all those licenses for a one time fee. media licenses aren’t cheap and have to be renewed. To succeed, the site would need a growth rate that just kept getting bigger. Once it hits saturation, it’s doomed.

  • GZ, my review of TVDEVO.COM is that it’s good. I bought it for $27 and installed it on my PC. Easy to use and works like the site explains. No complaints here.
    As far as how they advertise, who knows if they spam. What’s the difference? Any company that promotes its products online can be considered spam. For example, take this StarkInsider webpage. There are ads everywhere I look; to the top, bottom, over in the right column. Ads and promotions are fact of life on the internet (and off the internet too). I wouldn’t consider it a fault.

  • disqus_4dmCoNOutU

    I use my computer as well. I use the DVI output with an HDMI adapter. Then just use a basic HDMI cable to hook to your TV. Fantastic 1080 res from both NEtflix and Hulu.