Hulu is getting cheaper, if you can put up with the ads

Maybe TV with commercials isn’t all bad.
Maybe TV with commercials isn’t all bad.
Image: AP Photo/Dan Goodman
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As Netflix raises rates in the US, its smaller rival, Hulu, is slashing the price of its most popular plan.

The streaming-video service is lowering the rate of its on-demand package of TV shows and movies for subscribers willing to put up with ads. Starting Feb. 26, Hulu’s ad-supported library of on-demand TV shows and movies will cost $6 per month, $2 less than now. The new rate will roll out to existing US customers on their next billing cycles, after Feb. 26.

Hulu offered this package for $6 before, as part of limited-time promotions, and people who signed up at the lower rate were more engaged and held onto their subscriptions longer. As more streaming services crop up—including upcoming ones from Disney, WarnerMedia, and NBCUniversal—subscriber retention is becoming a bigger focus for the company. In the US, Hulu had about 25 million subscribers at the end of 2018, roughly 40% as many as Netflix (pdf).

Hulu also offsets the cost of its base plan with advertising, which allows it to lower prices even, as Netflix raises them to foot its costly content bill. The company said it brought in nearly $1.5 billion from advertising last year, a 45% lift from 2017.

People can continue to buy Hulu’s ad-free on-demand plan at the existing rate of $12 per month. (Though even with this package, for a handful of shows ads do play between episodes.)

Meanwhile, the cost of Hulu with live TV is going up by $5 to $45 per month. Hulu is raising the cost of its live-TV package to be more in line with what the company sees as its perceived value. The service, launched in 2017, includes about 60 live TV channels in addition to Hulu’s entire catalog of on-demand programming.