Hulu is taking the training wheels off their premium service, Hulu Plus, and releasing it out into the wild.  In addition, they’ve also slashed the price by $2, making the monthly fee $7.99.  While the price cut is not a surprise, most of the recent rumors suggested it would be even larger, possibly dropping the price as low as $4.99.

Last month I wrote about industry insiders who were whispering about a 50% price cut for Hulu Plus.  Then, just a couple weeks ago, they removed their “invitation-only” label and started allowing anyone to sign up for the beta (they called it a “preview), but the price remained the same.  I wondered if perhaps they were doing better than we had been led to believe, and that they’d changed their minds about the price drop.  Was Hulu still considering a change from $9.99 to $4.99, or had they decided to stand pat?

Turns out the ultimate truth was, as it often is, somewhere in the middle.  Hulu is now officially out of “preview,” and is open to the public as an official service.  For $7.99 you can get access to movies and TV episodes that aren’t available on the standard free version of Hulu.  You’ll still have to deal with some ads, but they aren’t as numerous or as intrusive.

And before you early adopters go whining about the six bucks you deserve from having paid a higher price for the last three months of the preview… fret not.  Hulu is going to refund your $2-per-month as a way of grandfathering you into the new pricing model.

I think the price point they’ve settled on is a good one.  It’s cheaper than Netflix, which should get them plenty of attention from customers looking to cut cable’s cord.  But it’s also not too cheap–which it may have been at $4.99 if they’d gone that far–when products and services are priced too low, some customers will subconsciously believe it holds little to no value.

There are more and more devices that can help you access your Hulu Plus account whenever you’re not in front of a computer–such as an iPad or the Playstation 3.  Sadly, the site is still blocked for Android devices like Google TV or the Droid Incredible.

Hulu has said they are on track to double revenue this year to nearly $240 Million.  My guess would be that the bean counters in the accounting office have determined that $7.99 is the optimal price to bring in new users but keep the revenue growth on track.  Time will tell, I suppose.  I don’t want to sound like a broken record, but the main issue with Hulu for me is that the content still seems limited to just a handful of sources, whereas Netflix feels like it has a more sizable selection.  Of course, you can’t stream everything from Netflix as you can from Hulu.  All in all, I think this is an interesting new step that will likely keep the marketplace competitive for a good while to come.