Hulu offers commercial-free option as pay-TV crams in more spots than ever before

In a move that signals yet another viewer-experience advantage for SVOD services, Hulu announced an $11.99-a-month commercial-free subscription option.

The offer builds on the company's existing $7.99 Hulu Plus product, which offers limited commercial interruptions. Hulu continues to look for ways to match or usurp its bigger commercial-free SVOD rival, Netflix (NASDAQ: NFLX).

The move comes as pay-TV programmers are trying to offset falling subscribers and audience reach by cramming in more commercials into every half of programming. Indeed, according to Sanford C. Bernstein analyst Todd Juenger, networks stuffed as many as 10 percent more commercials into each hour during the second quarter of this year.

AMC Networks led all crammers, pushing in 10 percent more spots onto platforms including its AMC flagship channel. Viacom (up 7 percent) and A+E Networks (up 5 percent) also significantly increased their ad loads in the quarter. 

"The continued ad stuffing is an obvious and unsustainable (some would say 'desperate') action by the networks to prop up ad revenue in the face of declining audiences," Juenger said. "Not only can this not be sustained going forward, it further contributes to the audience declines, making SVOD that much more preferable for viewers made numb by the absurd amount of ads (as well as decreasing the efficacy of the advertising that is still seen)."

Hulu recently announced that it grew its subscriber base to 9 million users, up 50 percent in just one year. Part of that growth can be attributed to aggressive spending on content -- the SVOD service just locked up movies from premium cable programmer Epix, for example.

Hulu is hoping to further accelerate growth with new service offerings.

"Many of our customers have asked us for a commercial free option, and so today we are excited to introduce just that," said Mike Hopkins, CEO of Hulu, in a statement. "Providing more choice for consumers is fundamental to the Hulu experience, in addition to an array of choices in content and devices, our customers can now choose to watch with or without commercials."

For more:
- read this Hulu blog post

Related articles:
Cable networks cram in up to 10% more commercials, with ratings down 9% in Q2, report finds
MoffettNathanson retracts Q4 commercial volume report
Premium cable channel Epix gets booted from Netflix, signs deal with Hulu

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