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Can a Pricier, Ad-Free Hulu Succeed?
For would-be cord cutters, the Hulu streaming service has been a great option for watching broadcast TV shows, with one glaring drawback: Despite paying $8 per month for the service, you were still forced to watch ads while viewing programs. Not anymore. Last week new ad-free Hulu was announced, though you’ll have to pony up an extra $4 each month for this option
But even those sticking with the $8-per-month plan are getting a bonus: Hulu says there will be fewer ads, and the ones you see will be more targeted to your interests.
An ad-free Hulu has been rumored for months, as the competition among streaming services has heated up. Neither Netflix, with more than 40 million subscribers and a service that starts at $8 a month, nor Amazon, which offers movies and TV shows to about 40 million customers who pay $99 a year for Prime membership, display ads in their videos.
With its new ad-free option, Hulu, with about 9 million subscribers, believes it can attract both those looking for a lower-priced alternative to their traditional pay TV service, and those who don’t mind paying a bit more for the ads to disappear.
However, not all shows will be completely devoid of ads. Some programs, including “Scandal,” “Grey’s Anatomy,” and “Marvel’s Agents Of S.H.I.E.L.D,” will have a 15-second commercial before the show starts, and a 30-second spot once it ends, though no ads during the programs.
Pricing and ad policies are only a part of the changes Hulu is making. In addition to its usual fare of TV shows from the major networks, the company has recently inked deals with several cable networks, including AMC, FX, and Turner, and it’s nailed down some exclusive subscription streaming rights for broadcast and cable shows ranging from “Seinfeld” and “South Park” to “Empire” and “Fargo.” Hulu also has a deal with Showtime that lets its subscribers sign up for the premium channel for just $9 a month instead of the usual $11.
Hulu is also making a push to beef up its movie library, which trails those of the other services. Recently, Hulu jumped in when Netflix didn’t extend its deal with Epix, securing multiyear rights to stream films, including Hunger Games: Catching Fire, Transformers: Age of Extinction, and World War Z, from Lionsgate, MGM, and Paramount. (Amazon has its own deal with Epix.)
Hulu is even getting into the original content game, an area where both Amazon and Netflix have found success. Among the planned upcoming shows are “11/22/63,” a time-travel JFK assassination thriller from Stephen King and J.J. Abrams; a comedy series from Amy Poehler called “Difficult People;” and the next season of “The Mindy Project,” starring Mindy Kaling.
While it’s too early to see whether Hulu can close the gap on its streaming competitors, at least on paper the company is now a more compelling option for those looking for cable-TV alternatives. The influx of new content makes the service more attractive, and you no longer have to complain as much about the ads—even if you stick with the lower-priced plan.
Consumer Reports has no relationship with any advertisers on this website. Copyright © 2006-2015 Consumers Union of U.S.
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