Commentary

Hulu Offering A New Ad-Free Version (No, Not Hulu Plus)

Obviously responding to my MediaPost suggestion that the world needs more ad-backed online content providers, Hulu, which is one, today announced it would begin offering an ad-free version.

“Many of our customers have asked for a commercial-free option, and so today we are excited to introduce just that,” said Hulu CEO Mike Hopkins in a blog post.

Right now Hulu viewers pay $7.99 a month and get programming with limited commercials, meaning “fewer commercials than scheduled television,” Hulu’s press release says, using a definition of “fewer”  that gives Hulu lots of room to grow.

Or viewers can pay $11.99 and go completely commercial free. Current subscribers stay as they are, but Hulu kindly points out, can switch at any time. For $4 more a  month, or $11.99. I did the math for you. That's more expensive than all but the most elaborate Netflix subscription.

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It might be worth it to some people, because while the commercials may be fewer, they seem doubly annoying.

Geek.com complains  that “shows are interrupted multiple times for unskippable video advertisements, many of which can repeat over and over during a watching session. These breaks can be as long as two minutes and include up to three ads. There is no way to eliminate them, although many people have said that if there was a slightly more expensive subscription plan that did so they would opt for it.”

So now they have that option. Again.

Hulu began as a free, ad-based service. It added kinda ad free Hulu Plus which is what this new ad free model is without the “kinda,” It had a few commercials, but not many.  Hulu Plus set you back  $7.99 a month,

So the new really commercial-free version is $4 more than the formerly virtually-commercial free version.

What’s really amazing is that now, the commercial-free version of Hulu costs more per month than Netflix, for which subscribers pay $7.99 a month for standard definition viewing or $8.99 (for HD viewing on up to two screens) to $11.99 (for HD views on up to four screens). Netflix CEO Reed Hastings said earlier this summer that it would not raise subscription fees but essentially raise prices by encouraging more people into those higher-priced tiers, and tightening up account-sharing.

Seventeen.com, the Website based on the magazine for teenage girls, went into shock when it reported that Netflix strategy. “This Netflix News Will Leave You In Tears,” its headline said, with the subhead, “Not the happy kind."

Netflix must know the market well enough to come to realization it can’t flat out raise rates, and that’s a conclusion Hulu seems to be following, but dangerously. Even with its new Epix movie deal and the critical success of “Dangerous People,” Hulu’s most marketable new series don’t start until later this year or early in 2016. It's no Netflix. For now, mostly, it’s best for catching up on current network shows or recent ones. I don’t know if that’s worth $11.99 to a lot of people. For $7.99, with some ads, it's worth it. Which brings me back what I wrote yesterday. .  . 

pj@mediapost.com

 
3 comments about "Hulu Offering A New Ad-Free Version (No, Not Hulu Plus)".
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  1. Douglas Ferguson from College of Charleston, September 2, 2015 at 1:55 p.m.

    So at last we have tacit agreement from the broadcast networks which control Hulu that commercials are annoying. Who'd have thought?

  2. Ed Papazian from Media Dynamics Inc, September 2, 2015 at 4:57 p.m.

    Of course, Douglas, but the broadcast networks are also ----at long last---waking up to the idea that they should be competing with Netflix, Amazon, etc. ---which is the more important aspect of this decision. Meanwhile, it appears that Netflix is charting a new course that will take it more into the "prmium" content arena and away from feature film libraries that are readily available on cable channels. This will also involve more original series productions which are very iffy propositions. It will be interesting to see how this gradually evolving confrontation plays out and, especially, whether the networks will challenge Netflix directly with original fare available exclusively on Hulu or other network-initiated SVDO services.

  3. Ed Papazian from Media Dynamics Inc, September 2, 2015 at 4:58 p.m.

    That's "SVOD", not "SVDO" services, as in the last line, above. Sorry.

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About the Author

P.J. Bednarski has written for MediaPost since 2012 on media and marketing topics. He can be reached at pj@mediapost.com