Don't underestimate how much convenience is worth to people. Netflix's value add over Blockbuster was convenience, Amazon's entire business model is "convenience". I can get people to come to my house, take all my laundry, and return it after it's been cleaned.
People value convenience in different ways, for sure, but I suspect there are a ton of people who would value the sort of convenience that Hulu can technically offer. I'm one of them, but I'm not entirely optimistic about how good their execution will be.
Well, actually, that isn't true. Streaming content makes Netflix much cheaper than renting movies (if the content serves your entertainment needs, anyhow).
I agree that convenience is worth something, but so is stable technology that already works. If Hulu was anywhere near the cost of cable, I think most people will stick with cable. They already own the DVRs and they already know how to use it. If Hulu is much cheaper, it has a chance.
People value convenience in different ways, for sure, but I suspect there are a ton of people who would value the sort of convenience that Hulu can technically offer. I'm one of them, but I'm not entirely optimistic about how good their execution will be.