• by Karlene Lukovitz  @KLmarketdaily, November 17, 2020

With Hulu Plus Live TV showing continued strong growth, parent Disney isn’t hesitating to increase the service’s price for the third time in three years. 

The virtual video-on-demand (vMVPD) service offers both subscription VOD access and live-streamed virtual pay TV boasting more than 65 channels. 

The price of the base package, with ads in the VOD bundle, is being bumped up by $10, or 18%, to $64.99, as of Dec. 18 — the same as rival YouTube TV, which hiked its own price by $15 over the summer. The premium tier, with no ads, is being increased by 16%, to $70.99. 

One difference: Hulu charges $10 per month extra for “Enhanced DVR,” including the ability to fast-forward through commercials — which is included at no extra charge in the DVRs of YouTube TV and most other live TV streaming services, notes Fast Company.

The on-demand version of Hulu is still priced at $6 per month with ads and $12 per month without.  

Hulu Plus Live TV added a net 700,000 subscribers in the third quarter, bringing its total to 4.1 million, according to Disney. 

That puts it about a million subscribers ahead of YouTube TV. Third-largest is Sling TV, with 2.5 million subscribers at $30 per month, followed by Philo, with 800,000 ($20); AT&T TV Now with 683,000 ($55); and Fubo TV with 455,000 ($59.99). 

The price increases likely reflect, in part, continuing increases in network carriage fees — although the live sports access that drives cost hikes, as we are all well aware, are still not back to predictable, pre-COVID seasons in some cases. 

But that aside, Disney — which has no doubt thoroughly researched the price hikes — is smart to charge what the market will bear.

To state the obvious, accelerating subscription volume growth at the cost of narrowing or eliminating the profit margin may be a viable strategy for a while, but it’s a killer in the long term.