I actually just last week tried this "nicer" way of pulling by putting tension upwards instead of yanking down. My horse completely ignored me when I did it, it was more effective (I have a habit of cutting the hairs when I yank down) and it was easy. I didn't get as close to the neck as she did in the video though. I just teased, wrapped and steadily pulled upwards. The hairs came out pretty easily and she could have cared less. Granted, she only did a little head shaking with the regular method.
I used to be very anti-pulling but my previous trainer pulled my horses mane for me one day and it looked so sharp I just had to keep up with it. I only spend a couple minutes every couple weeks to keep it looking nice. Not as big of a pain (for me or her) as I thought it would be. That said, if you life the "natural" look, more power to ya! But, it's definitely not cruel.