Netflix is a 2 part business. The first part is a DVD by mail system that many people use instead of going to Blockbuster. The cost is around $8 per month for 1 DVD at a time. This is becoming a smaller part of there business as the world moves to streaming media as a primary source of entertainment. Which brings me to there second piece of business, online streaming. For $8 per month you get unlimited streaming. There library is vast with shows/movies you have never heard of. They also have shows that are mainstream, but not the most recent season. The best thing about Netflix Streaming is no commercials, I repeat, NO COMMERCIALS! It makes sense, I mean, you pay for that via the $8 per month ;) Don't get me wrong about there library, it has a TON of great shows/movies, but its flooded with stuff that is less than desirable to the masses. I personally only have streaming, and I use it everyday to watch shows. To me not having the latest season is okay since I'm so behind in every show. #TooManyGoodShows
Netflix is also really good about being on every device you have. From your PC, to your Mac, to your Smart TV, to your smart phone, they have all bases covered.
Hulu kind of went in a different direction. Its free, they only provide a streaming service, they have commercials, and you can only stream on your computer. What they lack in service, they make up for the latest content. A lot of shows are available the next day after they are on the air. Hulu is good for people that want to keep up to date on shows that like to watch on there computer, and they don't mind commercials. HuluPlus is another story. Its a $8 per month service that gives you more content and less commercials, but still has commercials. It also allows you to watch on all your devices. I also feel that Hulu is lacking when it comes to movies.
My Conclusion
Netflix > Hulu for me. I am so far behind in shows that I'm okay with not having the latest season. Its a trade off; commercials and latest seasons vs. no commercials and one season behind. To me having no commercials saves me time, so I can watch 3 episodes of Lost on Netflix in the time it would take to watch 2 on Hulu. The great thing about both of them is you can unsubscribe at anytime. So if you were a new streaming goer (yes, that is a word) I would suggest Netflix to catch up on all the shows/movies, then switch to Hulu if you get bored with Netflix. I watch so many shows, by the time I get done with them all a new season is available.
Some may ask, why haven't you talked about sho.com or HBOgo? Well, you have to have cable plus a subscription to showtime or HBO to get said services. If you want to go that route then it will cost you, a lot (see Ground Zero for details on that).