In a recent Fierce Wireless Article I asked – Does Netflix on the iPhone matter? The answer was yes. With the launch of Hulu Plus the question must again be posed – does it matter? This time the answer isn’t as simple.

Netflix was important because it offered something for nothing (well, nothing more to be specific). Netflix on the mobile wasn’t likely to be the sole reason a subscriber would opt for Netflix but it could offer additional incentive to new users as well as extra value and stickiness to existing users. Hulu Plus faces a host of different challenges however:

1. It requires a new billing relationship and monthly fee. Unlike Netflix, which already has a billing relationship with its 14M+ customers who simply must download a free app, Hulu is asking users to pay $10 per month to a new provider. This cost may seem trivial but in an era of economic turmoil it is not and consumers will have to take money from somewhere else to pay the monthly fee for a service which isn’t quite going to let them cut the cord.
2. Content, content, content. Hulu’s library is deep but it’s not all encompassing. CBS isn’t on board yet and that’s a major wrinkle for a service that has to pride and position itself on its depth of content. Add to that confusing content availability – a current show’s current season will be available but libraries vary for every other piece of content. The lack of clarity will confuse users.
3. The competitors. Primetime2Go and BitBop have already camped out at the $9.99 price point but neither have the brand recognition of Hulu or as deep a library. They do however allow user to download video for offline viewing. One major caveat is that neither is yet or seemingly going to be available for iOS where Hulu Plus is starting before expanding to other platforms
4. Broadband caps. Hulu Plus will allow users to stream over 3G which will invariably frustrate iPhone users not on unlimited data plans and limit utility by demanding users primarily rely on WiFi to stream content.
5. No Freemium offering. If Hulu allowed users to access some content for free it would be much more compelling but the lack of any free mobile play severely limits the service.

So, the question again becomes – does Hulu Plus matter in mobile? The answer is - not a whole lot more than BitBop or Netflix. Hulu Plus is a further demonstration that content owners are reticent to adhere to ad-supported business models on mobile devices and until they do they’ll be limited to niche audiences. For more information, see Jia Wu’s post Online Premium Video: Hulu v. Netflix.