Streaming video service Hulu will start offering subscribers an option to eliminate advertising during programs, the company announced today.
The move is significant because Hulu has traditionally thought to be against any business model that didn’t include commercials, which were identical to those found on cable and satellite television and nearly as lucrative. And since Hulu’s owners consist of major media companies (Comcast, Disney, News Corp.) — all firmly pro-advertising (or so it seemed) — it didn’t seem like that would ever change. However, it looks like the move was done at least in part to make Hulu more competitive against the likes of Netflix and Amazon Prime.
Hulu has priced the new ad-free option at $12 per month, $4 more than the base subscription, which the company will continue offering. At that price, it seems crazy not to spend a little bit more not to have to see the same irritating rotation of commercial interruptions 3 to 5 times per episode. (And with Fall TV premiere season right around the corner, I’m guessing a lot of people will chose to upgrade to ad-free.)
It’s also interesting that Hulu opted to price the ad-free option on par with HBO Go and Netflix. With the exception of CBS and a few popular cable networks like AMC and BBC America, Hulu gives subscribers access to far more current-season content than Sling TV, which starts at $20 monthly.
The new subscription option also comes days after Hulu announced it had secured a licensing deal to add hundreds of popular films from movie service Epix — just as competitor Netflix ends its own contract.
At 9 million subscribers, Hulu is still far behind Netflix’s 42 million domestic customers. But it’ll definitely be interesting to see if there’s any fallout from these two developments — with Netflix users canceling their service for Hulu, much in the same way Apple Music is challenging Spotify for greater marketshare.