Hulu just announced that it will lower the price of its base, ad-supported subscription plan to $5.99 per month — down from the current $7.99 — beginning on February 26th. Hulu has offered its service at $5.99 previously on a promotional basis, and it clearly makes enough of a difference at pulling in subscribers to justify a price drop for the standard rate. In case you were concerned, customers will not see an increase in ad volume because of the reduced pricing. The $11.99-per-month “no commercials” plan will stay at its current price, as will the $12.99 Hulu/Spotify combo subscription, which Spotify handles billing for.
The price drop comes only days after rival Netflix announced increased subscription fees across all of its plans. The most popular plan (with HD streaming) is now $13 per month. Netflix’s content is, of course, ad-free, but Hulu is now creating enough of a cost divide that consumers might find its commercials easier to put up with. Hulu revealed earlier this month that it ended 2018 with over 25 million subscribers. That’s less than half of Netflix’s 58 million US-based customers, but it represents an impressive 48 percent increase in subscribers compared to where its subscriber count stood at the end of 2017.
However, Hulu does have one price hike of its own: the company is increasing the cost of its Hulu with Live TV service, which will jump to $44.99 instead of the current $39.99. As a result, the gulf between the standard service and Hulu’s internet TV offering is growing wider and a dollar shy of $40. The justification for the uptick in price is an increased channel selection — Hulu reached an agreement with Discovery, Inc. in September — and improvements to reliability and usability of the live TV experience. But this is also just the hard reality of these streaming TV services: they face the same hurdles as cable providers in reaching deals with networks and broadcast affiliates, and the major ones are all money losers. It’s inevitable that prices will continue to climb. You've also got to factor in that Hulu with Live TV includes the full on-demand product, which is relatively unique as these services go.
In an attempt to balance out the higher subscription charge, Hulu is lowering its fees for the live TV service’s optional add-ons: both the enhanced DVR and expanded multiscreen viewing packages are dropping to $9.99 from $14.99. The DVR option gives customers more storage (200 hours versus 50 hours for standard live TV subscribers) and allows them to fast-forward through commercials in DVR’d content.
The big unknown is how these prices might change once Disney assumes majority ownership of Hulu. Since that deal hasn’t yet been fully approved, Hulu has so far been unwilling to speculate on what’s to come. Disney executives have said they envision Hulu as an important piece of the company's streaming strategy: the service is more adult-oriented than Disney+ will be, and it exclusively offers many past TV hits that aren’t available on other platforms like Netflix (such as 30 Rock, Futurama, Lost, Seinfeld, and South Park). The company has been happy to spend heavily on licensed content, particularly with ‘90s shows. Netflix struck back against Hulu’s strategy late last year by spending $100 million to keep Friends on its platform.
In addition to the Disney uncertainties, Comcast has also indicated that it doesn’t intend to quickly sell off its 30 percent stake in Hulu. AT&T’s WarnerMedia owns the remaining 10 percent cut. So while Disney will have control once the Fox deal closes, there will be other voices at the table for now.
The new Hulu and Hulu with Live TV rates go into effect on February 26th for new subscribers. Existing customers will be switched over in their next billing cycle after that date.
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