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Large Numbers of Hulu Subscribers Pay $11.99 to Avoid Commercials

Phillip Dampier May 30, 2018 Competition, Consumer News, Hulu, Online Video 1 Comment

A large number of Hulu customers are willing to pay $4 more per month to banish advertisements from the streaming service’s growing catalog of content.

Hulu, a partnership between Fox, Comcast-NBC, Disney, and Time Warner, Inc., has more than 20 million paid subscribers, and around 40 percent pay $11.99 for the ad-free version of the service. Fox CEO James Murdoch told Recode he believed the ad-avoiding crowd had grown to represent 50% of Hulu’s subscriber base, but insiders later corrected Murdoch, claiming more than 60% still pay $7.99 a month for the ad-supported tier.

Hulu says its customers are getting ad loads “less than half that of traditional television” on its $7.99 plan, according to CEO Randy Freer.

More mysterious — how many customers are willing to pay $40 a month for Hulu’s Live TV service. Hulu isn’t saying.

Fierce Cable notes CBS All Access has also had success getting subscribers to pay $9.99 a month for an ad-free experience — $4 more than its standard $5.99 subscription price. CBS claims about one-third of its 2.5 million customers choose ad-free viewing.

CBS has been criticized for loading considerably more advertising content into shows than its rivals, which may have irritated enough customers to upgrade.

Joe Ianniello, chief operating officer at CBS, said the more subscribers are willing to pay for CBS All Access, the more leverage CBS gets forcing cable and satellite providers to pay more for the right to carry CBS affiliated television stations on their lineups.

“When the consumer is making the choice to pay $10 a month, that speaks volumes and that gives us a lot of strength when we go into those negotiations because we know that the consumer has knowingly elected to pay that. They’re not being subsidized by advertising, or subsidized in big bundle cable package; they chose to do that so that gives us a lot of confidence when we head into those revenue negotiations,” Ianniello said during CBS’ most recent earnings call.

Hulu Has Grown 42%, Achieving More Than 17 Million Subscribers

Phillip Dampier January 9, 2018 Competition, Consumer News, Hulu, Online Video No Comments

Hulu has picked up an additional five million customers since the streaming service last reported subscriber numbers in May 2016 — an increase of 42 percent.

That gives the streaming service more than 17 million paid subscribers, with a potential shared household audience of 54 million.

Hulu’s growth is attributed to a dramatic increase in its catalog of television series, original productions, and movies. When the service launched, it primarily showcased selections of recent episodes from current network shows aired by Hulu’s owners — Walt Disney Co. (ABC), Comcast Corp. (NBC), 21st Century Fox Inc. (FOX), and Time Warner Inc., and a handfuls of seasons of older series no longer airing on network television, many originally running on CBS.

Hulu has gradually shifted away from a free, ad-supported streaming service to a paid subscription model offering subscription options for limited or no commercials. As Hulu’s content library grew and the service offered a more complete library of series, it has also picked up subscribers. Much of its recent growth has come from attracting new subscribers seeking Hulu’s new original shows and a deep catalog of older series from the United States and United Kingdom. Hulu also improved its movie catalog with a larger selection of popular movie titles, some relatively recent.

In 2017, Hulu introduced a cable television replacement service offering live and on-demand programming from a wide selection of cable networks and a significant number of local network affiliates. Today, Hulu offers more than 75,000 episodes of 1,700 different television shows and features — more than double than any of its competitors.

But Hulu still has significant room to grow to reach Netflix, which has more than 109 million customers worldwide, including 52.8 million in the U.S., as of the end of September.

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