T-Mobile may not have great coverage — on our way to the Olympic National Park, my T-Mobile phone stopped working a long time before my friend's Verizon phone did — but I switched two weeks ago because the $80/month plan came with unlimited data, and I thought it would be convenient to watch Netflix streaming content and queued shows on Hulu from anywhere in the city. Since then I've been using data at about 10 times the rate that I did when I was capped at 2GB/month on Verizon.
But there was never any good reason that any of that data had to be downloaded over my data plan at all. I always know in advance what I'm going to be watching on Hulu, and almost always what I'm going to be watching on Netflix, which means if the apps would let me, I would rather download and queue up those movies and shows over my home broadband connection, and then watch the locally saved copies on the go. Hulu and Netflix would make at least the same profit off of me as they do now — I would still be watching Hulu's mandated advertisements before each show, and I would still be paying my monthly Netflix subscription. The difference is that I wouldn't be wasting a limited resource by downloading the content over my data plan. Even if my plan comes with unlimited data, that's not without costs, since one of the reasons I had to upgrade to unlimited data (and give up the broader Verizon coverage in the process) is that I can't download this content in advance at home. Otherwise, Verizon's sub-2GB data cap would have been fine with me.
Unfortunately, Hulu and Netflix apps both make it impossible to save their content locally, presumably due to a misguided attempt at DRM. ("DRM" is often used to refer to static content which has been encrypted in a way to make it difficult to copy; I'm using it more broadly here to include the practice of streaming content in a way which makes it difficult for users to save the content to a local file.)
(It has been pointed out, for example by Timothy Geigner on Techdirt, that data plan bandwidth may not truly be a "scarce resource" at all, and providers impose the data caps just to extract more money from users. The irony, though, is that even if the "scarcity" of cell phone plan data is not real, the streaming of content still constitutes waste of a precious resource, because users waste resources dealing with the data cap — prioritizing which content to download, or figuring out how to download the content illegally at home so they can save it as a local file. Or, they may simply decide to go without having the content on the go because they don't have enough data on their data plan — this counts as a deadweight economic loss caused by the DRM as well.)
You might think that the apps do not allow locally saved copies because the copyright owners prohibit it, but the Google Play app, for example, does allow you to download a saved copy of any content that you have rented or purchased from the Google Play store. (If you "rent" a movie or TV show episode from the Google Play store, you can still save it locally, but some predetermined time after you start watching the content, the content will "expire" and the file will be deleted.) So there is precedent for a non-fly-by-night company allowing you to save a local copy of content that you have paid for the right to access. So why not Hulu and Netflix?
I fear it may be that either the copyright holders, or the lawyers at Hulu and Netflix themselves, have been led to believe that locally saved content is easier to pirate, and neither of them want to be pegged as responsible for enabling piracy. This is fallacious for a couple of reasons: (a) If it's that easy, why hasn't it happened on a large scale with movies from Google Play, which can be saved locally? (b) Streaming content is just as easy to pirate, by, as a last resort, holding up a video camera to a screen playing the movie. (Yes, most users would not bother, but for piracy to occur, only one user in the entire world has to go to the trouble of doing this, and once it's done, an unprotected copy will be freely available on peer-to-peer networks for as long as people have any interest in the movie at all.) Which leads to: (c) Any user technically savvy enough to figure out how to pirate streamed content, is obviously going to be savvy enough to simply download the same content from p2p networks. In other words, forcing users to stream content instead of watching it from locally saved copies, gains the copyright holders and the app makers exactly nothing.
If I had to save content locally in the Hulu app before watching it, of course I'd have to watch ads before the content started playing, just as I do with the streaming version. In that scenario, if I had the time, I could probably try to find a black-market application that would watch the saved content without the ads, but like probably 90% of users, I probably wouldn't bother. And if I did want to make the effort, I'd just BitTorrent a copy of the movie or TV show instead, instead of trying to defeat copy protection on the local saved file.
I have no idea how much data plan bandwidth is used every day on content that users would have preferred downloading at home in advance, but it seems like a non-trivial percentage. Most Hulu and Netflix viewing is of movies or TV shows that you knew in advance you would want to watch, and could have saved. On the other hand, this wouldn't be true of random browsing of YouTube videos in the kind of mindset where you just watch a 60-second clip, feel mildly amused, and watch whatever comes up next in the recommendations bar to the right. Ironically, as you read these words, multiple telecommunications companies are drawing up plans to roll out billions of dollars' worth of communications infrastructure to provide more data services to more users — meanwhile, we could vastly increase the utility of the existing infrastructure with just the flick of a switch. (Well, a couple of switches -- convincing the copyright holders, and the Netflix and Hulu legal departments, that locally saved content is not illegal, as Google Play has shown, and could in fact make them more money. Hulu, after all, is making more money off of me now than the used to, since I'm watching more of their shows on the road, and viewing more of their ads.)
With a static download model, I'm sure the overwhelming majority of Hulu and Netflix users would go on paying (and Hulu would probably actually make more money, from the increased ad views). I would even start the day the same way, before even getting out of bed — by taking the phone on the bedside table, loading up a queued Hulu show, and getting the ad out of the way, then pausing just as the real show begins so that later on I can start watching it immediately. Because it just feels good to start the day with a feeling of accomplishment.