The rumor is today that Hulu’s moving forward with their plans to charge for access to the site.  At first blush, this sounds like a colossally stupid move.

The Web video site is getting ready to roll out its much discussed subscription offering of $9.95 a month, theLos Angeles Times reports. That jibes with chatter I heard earlier this week, though I’m not yet convinced this is a done deal.

But for argument’s sake, let’s say the report is correct, and the joint venture between GE’s (GE) NBC, Disney’s (DIS) ABC and News Corp.’s (NWS) Fox is about to test a premium plan. If they are doing so at $9.95 a month, it’s possible they’ve ended up with a price that will make both consumers and network TV guys unhappy.

How’s that?

$9.95 a month–$120 a year–is an awful lot to pay for free TV.

Normally, I’d agree with that sentiment. I’ve certainly come a long way from where I started in my opinion on Hulu. When it was first rumored and then debuted, I was one of the few to give it a scathing review (my post was entitled “Hulu: Blocked Outside the US, Broken Inside the US,” but in my defense, the press account I was given at the time resulted in an absolute and total fail).

Since then, while I still have the same major quibbles with Hulu’s approach to online content and distribution, I’ve come to appreciate the fact that it allows me to spend less time utilizing my cable company (and it’s horribly sub-par picture) and more time watching high resolution content of the shows I actually care about. Right now, if I ever achieve my aim to cut the cord completely with my cable company, an essential piece of the puzzle will be Hulu.

Right now, I have two options for viewing Hulu in my livingroom, given the equipment I own. I can set up a television media center PC (which I’m currently tweaking to my satisfaction – more on that later, hopefully), or I can install a plug-in for my xBox 360 called “PlayOn.” PlayOn allows me to stream video (from podcasts, Hulu, major media sites and a plethora of other sources).

There are two problems with the PlayOn plug-in that are, as of the moment, unavoidable. First, and most annoyingly, it virtually hides the menus to find new content in an unattractive, text only menu area of the xBox interface deep within the navigation.  Once you’re in the PlayOn interface, you have to hunt through weirdly ordered lists to find the show you’re looking for. To a certain extent, I understand this – it’s a hack, not an official part of the xBox Live platform. For what it is, it’s impressive.

The other major gripe is that the resolution doesn’t really upscale well to my 52” HDTV.  Netflix works wonderfully upscaling to that resolution, but doing virtual screencapturing and streaming that screencap of that stream (which is how PlayOn works) introduces a level of artifacting and pixelation my eyes can’t quite seem to get used to.

Again, a hack, so understandable.

I’d Pay $10 a Month for Native Hulu on my xBox

Just from a cost perspective, it’s a win. $10 a month for nearly everything I get from the cable company for one fifth the price. What’s the downside? Sure the cable company loses out, but it reduces a few levels of middlemen for the content providers, so it’s an ideal situation for the networks.

Why don’t I just use a media center PC, you ask? Well, that’s my next move, but I can tell you right now that the average person is not going to go through what I have been going through to find the right combination of hardware and software to make this thing work seamlessly enough for everyone in the family to navigate to what they want to watch.

Putting this system together has been a lot less of a headache than it was six years ago when I created my first media center PC, but I’m not indicative of most people. The average media consumer wants to turn on the TV and not think, not pull out a keyboard and mouse and try to double click the Hulu icon from their desktop sitting on their couch. No online video consumption device (engineered for the livingroom or the PC) satisfies the “veg-factor” requirements necessary to completely replace traditional TV, but the xBox is a mainstream-accepted way to consume livingroom entertainment, and longform traditional media would be well at home, and paid for just as readily as Netflix is there.