Hulu recently dropped the price of its ad-supported tier from $7.99 per month to $5.99, but the promotional price only lasts for one year.
The promotion, available to new subscribers, helps Hulu undercut the $7.99 entry level tiers of competitors Netflix and Amazon Prime Video. Hulu doesn’t appear to be offering promotional pricing on its ad-free tier, priced at $11.99 per month.
The move to better compete with Netflix, which now has more than 83 million total subscribers in the U.S. and abroad, comes as Hulu is also prepping a live streaming TV service that will compete with AT&T’s DirecTV Now and established virtual MVPDs like Dish Network’s Sling TV and PlayStation Vue.
Hulu’s live service has yet to set a launch date or set a price for its service, but reports have placed the service’s starting price at $35/month, which would cost more than the basic tiers of both Sling TV and Vue.
Hulu, which is jointly owned by Comcast, Disney, Fox and Time Warner, could have trouble competing with full TV channel bundles offered by existing pay-TV providers, especially if it’s priced around $40, according to BTIG analyst Brandon Ross.
“The ramifications of success could have an effect that goes far beyond just Hulu's partners, from MVPDs to cable networks to Netflix. A failed Hulu virtual MVPD could dispel the idea of widespread competition for incumbent bundles from virtual bundled competitors,” wrote Ross in a research note. “We are skeptical that the Hulu bundle will meaningfully impact the MVPD landscape from a subscriber standpoint. We simply wonder whether the price/value will be strong enough to attract customers at ~$40, with much less content than the current larger bundles…”
Hulu’s new promotional price comes as the CW opted out of Hulu in favor of offering in-season episode streaming on its own platform, while retaining Netflix as the exclusive home for past seasons of its programs.
Meanwhile at Netflix, reports seem to show the SVOD giant has slowly been reducing its streaming content library as its focused has shifted more toward original content. According to Exstreamist, there are currently 5,302 titles available for streaming on the service, representing a 50 percent decrease over the last four years.
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