Television changed completely this morning with the announcement of a subscription Hulu service. With Hulu unavailable in Australia, we’ll see minimal effect of its launch. The launch of Hulu Plus in the dominant US television market signifies a radical change in television distribution.

Hulu Plus will cost subscribers $9.95 in the US and is available from today on the iPad, iPhone, and on compatible Samsung networked HDTV’s and Bluray players. The service will further be rolled out to Vizio and Sony devices (yes, this includes the PS3) this Spring. Content offered will be in line with the free content available already for US viewers on the Hulu site and advertising will remain at its current level.

While Hulu Plus does not offer as much content as one can receive via their cable television subscriptions, it does offer access to a number of marquee programs that are currently screened on TV, as well as contemporary classics. A list of these offerings can be found on the Hulu site and offers a fairly impressive selection. For viewers who are not interested in 24 hour news or sport (ie. content that only really offers value broadcast live), it provides a valid alternative to existing cable television offerings, and can be used nicely to supplements ones broadcast TV watching.

Hulu itself has served as a ‘game-changer’. It is jointly owned by multiple TV networks/distributors and offers a catch-up TV service with an extensive archive of additional content. Hulu is an entirely new distribution model that competes directly with broadcast TV, subscription TV, and the DVD market. With todays announcement of Hulu Plus, it adapts Hulu into serving as a platform that can finally be monetised.

The biggest challenge that Hulu Plus faces is the question of whether consumers, already used to Hulu being offered as a free service, will be willing to embrace it as a subscription service. Something that is yet to be fully explored is the way that users interact with the Internet via different modes. Already we know that mobile net usage differs from the experience of being seated in front of a computer screen. If users are able to view the Hulu by TV experience differently to the Hulu by PC experience, they should encounter very little consumer disatisfaction.

eMarketer have stated that the percentage of U.S. adult Internet users who watch full-length television episodes online is expected to grow to 72 million in 2011, up from 50 million in 2009.

As previously stated, this is not a service that is currently available in Australia. With complicated content deals established with local broadcasters, it may be a while before we see Hulu offered in Australia. If Hulu is successful as an IPTV delivery service, it will likely encourage others to offer similar products. TV is now being delivered via to consumers television sets legally and on demand through a service that the viewers are comfortable with.  Such a move can only strengthen the industry and match the needs of an increasingly diverse viewership.

Further reading: The WSJ, PC World