Pay for Web TV? No Problem! Hulu Plus "Exceeding Expectations"

You can watch Hulu anytime you want on your PC, for free. But if you want to watch the service on your iPhone, your iPad or your TV, you’ll need to pay $7.99 a month.

Who’s interested in that? Plenty of people, according to Hulu CEO Jason Kilar. He says the service, which formally left its beta phase a couple of weeks ago, has “exceeded expectations” and has already hit its year-end subscriber goals.

Cool! So how many people is that? Kilar won’t say, of course–the joint venture between GE’s NBC, Disney’s ABC and News Corp.’s Fox is awfully selective about the data it releases. (Disclosure: News Corp. also owns this Web site.)

But Kilar is willing to talk broadly about the service, and the way subscribers are consuming it: While Hulu Plus lets you watch video on mobile devices like Apple’s iPhone and iPad (but not Google’s Android handsets) most viewing is happening on TV screens, he said.

And most of the time, the service is getting to the TV from the Web via Sony’s PlayStation 3 console, one of several devices Hulu is working with (not included, so far: Google TV and the Boxee Box). So that’s interesting.

But why pay for Hulu Plus at all? Why not simply connect your PC to your TV with an HDMI cable, and watch regular Hulu, for free?

You can! And Hulu’s efforts to persuade you not to do so illustrate a key problem for the service and the Web video business in general.

Because while consumers may not see any difference between the stuff they watch on the Web and the stuff they watch on TV, advertisers and programmers do. The first kind of video is much less valuable than the second.

That’s going to change over time, but for now, Hulu has to do its best to make sure that anyone who watches Hulu on a TV screen “pays twice”–by both watching ads and handing over a credit card.

Let’s let Kilar explain in his own words, via an interview I taped at Hulu’s New York office yesterday. Note the storyboards for Hulu’s excellent Alec Baldwin-is-an-alien ad behind him.