Hulu outbids Netflix, pays $3.5M per episode for U.S. streaming rights to 'This Is Us'

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The monster deal for “This Is Us” comes as Hulu is wielding its $2.5 billion budget to buy lots of older TV shows to fill out its on-demand library.

Hulu has beat out Netflix for the rights to stream NBC’s popular drama “This Is Us,” but the streaming service had to pay a hefty price to land episodes on its platform.

Hulu and NBCUniversal—which owns part of Hulu—are reportedly paying 21st Century Fox, which produced “This Is Us,” a whopping $3.5 million per episode for U.S. streaming rights to the show. That makes the deal one of the most expensive ever for Hulu.

The monster deal for “This Is Us” comes as Hulu is wielding its $2.5 billion budget to buy lots of older TV shows to fill out its on-demand library as it looks to build on the original content momentum it generated with “The Handmaid’s Tale,” which won best drama series at this year’s Emmy Awards.

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In July, Hulu announced an expanded deal with Fox to add about 3,000 episodes of older shows including “How I Met Your Mother,” “Glee,” “Bones” and “Burn Notice.” More recently, Hulu won the rights to stream old episodes of “Will & Grace” shortly before the revived series started back up on NBC.

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Meanwhile, Netflix has continued to outpace nearly every other programmer except for ESPN in terms of spending on original content. The service intends to drop about $7 billion per year on original series and films.

That spending spree recently resulted in another set of price hikes for the service’s most popular plans. Netflix’s standard service from $9.99 to $10.99 per month, and price of its premium tier from $11.99 to $13.99 per month.

As UBS analyst Doug Mitchelson pointed out though, the implementation of price increases soon likely means Netflix is in line for another strong subscriber growth quarter.

“We would expect mgmt. would be unlikely to implement such a price increase if U.S. subscriber trends were disappointing, bolstering our confidence further. Further, we expect less speculation this time as to what the price increase means for future content spending given 2018 has already been indicated at +$1b Y/Y,” wrote Mitchelson in a research note.