In addition to maintaining its current $7.99 version with ads, Hulu would make a second version available for a price in the neighborhood of $12-$14. While that price point would be more expensive than most SVOD options in the U.S. marketplace, the logic behind the move is that would avoid siphoning away the 9 million subscribers already paying for the current version.
But the new offering could help Hulu better compete with its biggest rivals, Netflix and Amazon Prime, which have both always been without ads. Hulu has been criticized for requiring for subs to pay but sit through ads; on the other hand, the dual revenue stream has drawn respect within the media industry.
Hulu did not respond to inquiry for comment.
In an April interview with Variety, Hulu CEO Mike Hopkins said the company was considering a range of ideas for an ad-free version of the service, declining to discuss details. But he also touted Hulu’s dual revenue stream of ads and subscription fees, akin to cable TV networks, as providing more value back to programming partners.