×
You will be redirected back to your article in seconds

Hulu Hikes Price of Live-TV Bundle to $45 Monthly, Drops VOD Plan With Ads to $6

Hulu wants to drive more customers to its ad-supported streaming package — lowering the official price from $7.99 to $5.99 per month — while it’s trying to turn a profit on the live-TV bundle with a price hike.

Starting next month, Hulu With Live TV will increase by $5 per month, rising from $39.99 to $44.99 per month (a 12.5% increase). At the same time, the monthly price of Hulu’s ad-supported video-on-demand service is dropping by $2, as it seeks to grow advertising revenue. The ad-free VOD plan will remain unchanged, at $11.99 per month.

Hulu’s new pricing will go into effect beginning Feb. 26 for new subscribers. For existing subscribers, the new prices will be reflected in their next billing cycle after Feb. 26.

The changes come after Netflix last week raised U.S. streaming prices for all customers, including an 18% hike on its most popular plan, the Standard two-stream HD tier, from $10.99 to $12.99 per month. Hulu had been prepping the pricing adjustments for several months — but given the timing, the company is hoping its entry-level streaming plan looks like an even more attractive option against Netflix’s price increase.

Hulu claimed its subscriber base topped 25 million last year, with the service netting 8 million total new subs for 2018. It doesn’t spell out which plans those customers take, but a rep confirmed that the “majority” of Hulu customers are on the ad-supported VOD plan. In September 2018, Hulu touted hitting 1 million subscribers for the live-TV service.

Why is Hulu dropping the price of its most popular plan — given that it’s continuing to lose money? The joint venture lost up to $440 million in the third quarter of 2018, more than double a loss of $207 million a year earlier, according to filings by its parent companies.

At the cheaper price, Hulu has seen higher engagement and retention among subscribers. And by pricing the ad-supported tier lower than rivals like Netflix, Hulu hopes to amass an even bigger audience for its ad business: The company claimed ad revenue jumped more than 45% in 2018, to nearly $1.5 billion. In addition, Hulu has already run extensive promotions for the VOD plan with ads for $5.99 per month for the first 12 months (and even offered it for 99 cents per month over Black Friday), and is now setting that as standard price. Also note that Netflix raised the price of its entry-level Basic plan, which offers a single non-HD stream, from $7.99 to $8.99 per month.

Meanwhile, the rationale is more straightforward for the price hike for Hulu With Live TV. After an initial land-grab to sign up cost-conscious TV subscribers at the $40 price point — amid aggressive competition from the likes of Dish’s Sling TV, YouTube TV, and AT&T’s DirecTV Now — Hulu needs to make the package profitable.

Over the past year, Hulu has added nearly a dozen live TV channels to the bundle, including the CW, Discovery Channel, TLC, Animal Planet and ABC News. It now includes more than 60 channels, including local broadcast channels for ABC, CBS, NBC and Fox. CEO Randy Freer, speaking at a conference last month, claimed the company has been able to improve margins on the live TV product by 50% over the past year but he also acknowledged, “We all have to ultimately run a business that can be profitable.”

Hulu’s rejiggered pricing strategy comes ahead of a change in ownership structure: Disney is set to take over 60% control of Hulu after absorbing 20th Century Fox’s stake, with Comcast retaining its 30% stake and AT&T’s WarnerMedia holding 10%. Disney CEO Bob Iger has said he wants to expand Hulu internationally and boost investments in original content.

Hulu positioned the price changes as providing a greater range of choices to consumers. The service boasts an on-demand lineup of more than 85,000 TV episodes, more than any other U.S. streaming service, plus thousands of movies. In addition to current shows like “The Good Doctor,” “Killing Eve,” “This Is Us,” “Atlanta” and “Grown-ish,” all of Hulu’s packages include original series like “The Handmaid’s Tale,” “Marvel’s Runaways,” “Future Man” and “Castle Rock.” In addition, it has exclusive U.S. streaming rights to all seasons of TV series including “ER,” “Lost,” “King of the Hill,” “30 Rock,” “Family Guy,” “Seinfeld,” “South Park” and “Curious George.”

“Hulu is giving TV fans what they want — choice, flexibility and control — in what they watch, how they watch and what they pay for the TV plan that best suits their needs,” the company said in a statement about the price changes.

More TV

  • Walt Disney Archives Founder Dave Smith

    Walt Disney Archives Founder Dave Smith Dies at 78

    Walt Disney Archives founder Dave Smith, the historian who spent 40 years cataloging and preserving the company’s legacy of entertainment and innovation, died Friday in Burbank, Calif. He was 78. Smith served as Disney’s chief archivist from 1970 to 2010. He was named a Disney Legend in 2007 and served as a consultant to the [...]

  • TV Writer Christopher Knopf, Former WGA

    TV Writer Christopher Knopf, Former WGA West President, Dies at 91

    Prolific Emmy-nominated television writer Christopher Edwin Knopf, former president of the Writers Guild of America West, died in his sleep of congestive heart failure on Feb. 13. He was 91. Knopf was born in New York and attended UCLA, leaving during his senior year to join the Air Force during World War II. He finished [...]

  • Jussie Smollett The Black AIDS Insitute

    Jussie Smollett Case: Two Suspects Released Without Charges as New Evidence Emerges

    After two days of questioning, the Chicago Police Department announced Friday evening that it has released two suspects in the Jussie Smollett case without filing charges. Police spokesman Anthony Guglielmi said that detectives had developed new information in the case. Police no longer consider the men to be suspects. “Due to new evidence as a [...]

  • GOTHAM: L-R: Guest star Cameron Monaghan

    TV News Roundup: Fox Drops 'Gotham' Final Season Trailer (Watch)

    In today’s TV news roundup, Fox released a new trailer for an upcoming episode of “Gotham” and Disney has announced the cast for its upcoming “High School Musical” series.  FIRST LOOKS Showtime released a new trailer and the official poster for the upcoming fourth season of “Billions,” premiering March 17 at 9 p.m. ET/PT. In [...]

  • Chris Rock

    Chris Rock to Direct Kenan Thompson Comedy Pilot at NBC

    Chris Rock has come onboard to direct the NBC single-cam comedy pilot “Saving Kenan,” Variety has learned. Rock will also executive produce the pilot, which stars “SNL” mainstay Kenan Thompson. Thompson will play a newly widowed dad determined to be everything for his kids while begrudgingly letting his persistent father-in-law become more involved in their lives [...]

  • Peak TV Saturation TV Placeholder

    Apollo Global Management Buys Majority Stake in Cox TV Stations

    Private equity giant Apollo Global Management has cut a deal with Atlanta-based Cox Enterprises to buy a majority stake in Cox’s 13 TV stations as well as three newspapers and a handful of radio stations in Ohio. Apollo has been in the hunt for broadcast TV stations for some time. Cox’s station group, which includes [...]

  • Ken Jeong TV Take Podcast

    Listen: Ken Jeong on His Return to Stand-Up and New Netflix Special

    Welcome to “TV Take,” Variety’s television podcast. In this week’s episode, Variety’s executive editor of TV, Daniel Holloway, talks with Ken Jeong about his Netflix comedy special, “Ken Jeong: You Complete Me, Ho,” and being a judge on Fox’s “The Masked Singer.“ Jeong started working on his new standup act after ABC canceled his show “Dr. [...]

More From Our Brands

Access exclusive content