After Netflix instituted price increases for all its U.S. subscribers last week, Hulu is lowering the cost of its ad-supported tier from $7.99 per month to $5.99.
The price decrease goes into effect on Feb. 26 and, according to The Verge, won’t mean more commercials. Hulu’s commercial-free tier of service will remain priced at $11.99 per month.
Hulu has offered the $5.99-per-month pricing in the past year as a promotional rate, but with today’s announcement the company is making it the new going rate. And it comes at an interesting time considering Netflix, arguably Hulu’s biggest competitor, just raised prices from $8 per month to $9 for its basic tier, from $11 per month to $13 for its HD service tier, and from $14 per month to $16 for its Ultra HD service tier.
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While the price is coming down for Hulu’s basic service tier, the price is climbing from $39.99 to $44.99 per month for Hulu with Live TV. Those changes will also go into effect on Feb. 26, and unlike virtual MVPD competitors like YouTube TV, which grandfathered in existing customers at the old rate before raising its price to $40 per month in March 2018, Hulu is rolling out the increased price for all of its live TV subscribers.
For $44.99 per month, Hulu with Live TV subscribers get more than 60 live television channels (including cable networks and local broadcast television) while also getting access to Hulu’s original series, films and on-demand library.
Along with the news of the price changes, Hulu pointed out that over the past year, it has added more exclusive TV episodes and movies, launched more live TV channels—including The CW, Discovery Channel, TLC, Animal Planet and ABC News—and upgraded the technology platforms to support more devices.
Comcast, Disney and Fox each currently own 30% of Hulu—although Disney will own 60% after its $71.3 billion Fox acquisition goes through—and AT&T’s WarnerMedia owns the other 10%. While Hulu has grown its subscriber base to more than 25 million, the service still loses money for its owners. Late last week, Disney disclosed a $580 million loss in equity investments for the fiscal year ending Sept. 30, 2017. Disney blamed the loss primarily on Hulu.