Seeking to keep its much larger SVOD rival, Netflix, within shouting distance, Hulu is contemplating the inclusion of a higher-priced, ad-free service.
According to the Wall Street Journal, quoting individuals "familiar with the matter," Hulu is feeling competitive pressure from Netflix and Amazon Prime Instant Video, which aggressively tout the ad-free aspects of their streaming services.
Hulu, which is already making major investments in original content to try to keep up with Netflix and Amazon, is considering pricing an ad-free version of its service at $12 to $14 a month, the WSJ reports. The relatively high price point, the paper adds, would limit the number of current Hulu subscribers from switching out of the ad-free service.
Hulu currently has a free service, offering limited content and ample commercials. It also has a $7.99-a-month subscription service, which also still includes ads, but not as many as the free service.
Hulu is jointly owned by 21st Century Fox, the Walt Disney Company and Comcast/NBCUniversal. It is viewed by executives in the programming industry as being more friendly to the established TV business. As a result, the service has been able to carve out a number of key exclusive content deals with programmers including AMC and FX.
Meanwhile, under a new management team headed by CEO Mike Hopkins, the company has significantly increased its spending on original content. The effort appears to have already produced subscriber growth--Hulu is up about 3 million paying customers to 9 million worldwide in just one year.
Hulu remains dwarfed by Netflix, which just reported that it has reached 65 million paying subscribers worldwide. That uptick represents another competitive challenge to pay-TV operators, as well as linear programmers, who have been able to trace appreciable audience and subscriber erosion back to use of SVOD services.
- read this Wall Street Journal story
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