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Summary:

Hulu’s new paid version, Hulu Plus, has come under fire for charging a monthly subscription fee without taking ads out of its programming. Hulu CEO Jason Kilar tells us he’s not averse taking ads out entirely; users would just have to pay a higher price for it.

The TV streaming service Hulu, which recently launched a paid subscription product, Hulu Plus is not averse to the idea of launching an even more expensive ad-free version, CEO Jason Kilar told me on Wednesday in a chat. While it has been critically acclaimed, Hulu Plus has drawn complaints for charging a $9.99 monthly subscription fee yet continuing to show ads (the fee is for expanded selection and greater flexibility).

With the new service, a subscriber is essentially paying twice — once by paying for a subscription and once by watching advertisements in the video. When I asked Kilar to comment on the criticism being leveled at the company, he said that the company was comfortable with the idea of offering a higher-priced version if there is demand from customers.

Kilar argued that in the premium content distribution business there is no one model. Whether it is his competitors or his own offerings, there will many different business model options. He pointed to the old TV business as an example of how different business models exist. There are ad-supported broadcast networks, subscription only operations such as HBO and then there are hybrids like TNT and TBS that charge subscriptions and also air advertising on their channels.

Photo by Rodrigo Sepulveda courtesy of DLD Conference via Flickr

  1. Om, it would appear that Hulu Plus isn’t targeted at the informed consumer of online video services.

    Perhaps they intentionally launched with an offering to test the market size of the “uninformed consumer” segment. If the subscriptions are not forthcoming, then they’ll adjust the offer (lower price, or no-ads) in reaction to the market reality.

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  2. [...] a bigger selection and more platforms for a fee, instead. Well, Hulu CEO Jason Kilar says that ad-free Hulu is still a possibility, at a higher price. In response to criticism of the subscription-plus-ads model, where users [...]

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  3. [...] be willing to do away with the ads – so long as enough customers are willing to pay more money. Om Malik was able to talk to CEO Jason Kilar sometime yesterday, and in an article published today, Malik [...]

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  4. [...] While Hulu Plus has been critically acclaimed, the service has come under criticism for charging a $9.99 monthly subscription fee for its ad-supported service. Kilar said that the price was set by Hulu after talking to potential customers. However, if in the future its customers want a higher-priced ad-version of the service, Hulu may offer such a super-premium service.  [...]

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  5. [...] Speaking with Om Malik, Hulu CEO Jason Kilar remarked that his company would be willing to explore an even higher-priced premium plan that axed commercials, assuming there's enough demand for it. [...]

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  6. [...] Fortunately, Hulu CEO Jason Kilar has said that an ad-free Hulu is a possibility after all, though he did tell NewTeeVee that he didn’t see a problem with the advertisements because consumers already pay for [...]

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  7. [...] Fortunately, Hulu CEO Jason Kilar has said that an ad-free Hulu is a possibility after all, though he did tell NewTeeVee that he didn’t see a problem with the advertisements because consumers already pay for [...]

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  8. [...] In a chat with Om Malik, Hulu CEO Jason Kilar noted that he’s open to exploring new plans–Hulu Plus isn’t necessarily the end game for Hulu. [...]

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  9. [...] Hulu’s $10 a month premium service would still show ads to users. Those individuals may have reason for hope today as Hulu’s CEO, Jason Kilar, has said that an ad-free version of the service is a [...]

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  10. “With the new service, a subscriber is essentially paying twice — once by paying for a subscription and once by watching advertisements in the video.”

    So… it’s exactly the same model as cable subscriptions? The customer pays for the right to watch advertising-laden programming, and premium programming (e.g. HBO) costs even more.

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