Streaming Wars: Netflix Vs. Hulu Vs. Apple TV (NFLX, AAPL)

Internet streaming services provide consumers with a wide range of viewing options as well as a viable alternative for people who want to cut the cord from their cable companies. How do these services stack up against one another? Netflix (NASDAQ: NFLX) and Hulu are competitors, but their features appeal to different viewing preferences. Apple TV competes with Netflix and Hulu in specific areas but also allows viewers to stream content from both service providers. The following is a summary of each of these streaming services, including how they work as well as what consumers can expect from each service.

Netflix is an app-based streaming service that requires an Internet connection, either with a Smart TV, a gaming console such as an Xbox, a laptop/tablet or a Blu-ray player. If the Netflix app is not already on the device, the user can download it from the Web. As of 2017, there are three pricing tiers, starting with basic service at $7.99 per month. This tier allows for streaming to one device at a time and does not include high definition (HD). For $9.99, viewers can watch HD streaming on two devices simultaneously, while the premium tier at $11.99 allows streaming of Ultra HD when it’s available on up to four devices.

The strong suits for Netflix are its selection of movies and its original television shows. Netflix offers a huge library of movies spanning from productions by Marvel Entertainment, which is now owned by The Walt Disney Company (NYSE: DIS), to an extensive collection of documentaries. The streaming service is also gaining attention for its award-winning original series, including House of Cards, Orange is the New Black, Narcos and Stranger Things.

Netflix also offers a wide range of TV series (with no commercials), but its viewers must wait up to a year before the most recent seasons become available. For viewers who can wait or who are trying to catch up on a long-running series, the service provides a “binge-watching” solution, but for others who prefer to stay current with their shows, Netflix falls short in this area.

Hulu is also app-based, and the Internet connection options are the same as those available with Netflix. The service offers two pricing tiers: the Limited Commercial plan for $7.99 and the No Commercial plan for $11.99. In the Limited Commercial plan, the number of ads is less than the number of those appearing on network broadcasts. Both plans have access to the same library of shows and movies, but the No Commercial plan gives subscribers the option to add Showtime for $8.99 per month.

Hulu’s strong suit is its streaming of current network and cable shows within 24 hours after they air live, including Grey's Anatomy, Homeland and Modern Family. One disadvantage is that Hulu sometimes offers only the last four or five shows in the current season, which can be frustrating for viewers who want to watch a season from its first episode.

Where Hulu falls short against Netflix is in a comparison of movie selection and original programming. Generally speaking, the selection on Hulu is divided between older movies and its relatively small collection of Criterion titles, which includes Academy Award-winning films such as Selma as well as art house films directed by Ingmar Bergman, Jean Cocteau and Federico Fellini. Hulu has some original programming, but shows such as Deadbeat and The Path have not created the level of viewer interest as the original shows on Netflix.

Apple TV is a different animal than app-based Netflix and Hulu, in that programming, apps and games run through an Apple set top box that sits between the TV and the Internet connection. There are two prices for the Apple TV hardware: $149 for the 32GB model and $199 for the 64GB box. Both set tops include a newly designed remote control with a touch pad, an app store and full integration with Apple's Siri voice-recognition for search and device operation.

Apple TV allows viewers full access to the iTunes library, which has the largest amount of content available for any streaming service due to partnerships with most, if not all, movie and TV studios. While some may see access to the iTunes library as direct competition for Netflix and Hulu, Apple TV actually enables streaming for both services. In addition to Netflix and Hulu, this service offers a full slate of online programming, including HBO Go, MLB.TV and YouTube.

The strong suit for Apple TV is the sheer volume of content that is available through the service. Users can rent or purchase movies, and they often have the option of paying for HD or saving a couple of bucks and watching standard-definition (SD) versions. Television shows are available for purchase by the series or in single episodes. Viewers also have the option of bundling multiple seasons of television shows with a “season pass.”

The biggest disadvantage of Apple TV is that it does not offer a subscription service, and purchases made on an a-la-carte basis can add up quickly. That may change, however, as there are expectations for Apple (NASDAQ: AAPL) to offer a subscription-based streaming service with an estimated subscription cost of $30 to $40 per month.

Each of these three services has strengths and weaknesses. Netflix provides a huge library of movies and award-winning original TV series, but viewers have to wait a year to see current network/cable TV shows. Hulu solves that problem by making current TV shows available within 24 hours, but the service has limited movie offerings and has yet to hit its stride with original programming.

Apple TV offers apps for Netflix and Hulu in addition to access to all the movies, TV shows, games and music in the iTunes library. When compared to cable, and bills that can run into hundreds of dollars per month, subscribing to all three services provides two solutions: the cost may be a fraction of typical cable bills while viewers have access to an immense collection of content that grows in size with each month.