But if I can subscribe to thousands of shows for $10, why would I ever buy a $40 DVD set of a single season? Hulu devalues their product far more than $1/show.
I think there's some truth to that, but the studios seems to be more willing to experiment in some areas than others. I don't know why. They seems more comfortable with subscriptions plans than on-demand pricing. They have been offering "free" on-demand of their shows through cable and satellite providers for years... so it's possible they see Hulu as something similar.
I'm not saying it all makes sense to me -- I was just responding to the "it's all smokescreen" comment.