An ad-free Hulu? Too little, too late

By Jim O'Neill on Jul 21 2015 at 8:00 AM
An ad-free Hulu? Too little, too late

Late last week, rumors emerged that Hulu was considering adding an ad-free option to its streaming service.

The Wall Street Journal, citing unnamed sources, said Hulu could debut the service later this fall, with a price of between $12 and $14 per month, more than Netflix, Amazon Prime Instant Video, Showtime and in line with HBO Now.

Hulu already operates a paid tier (originally known as Hulu Plus, an $8 a month service) and a free, Basic Hulu.

The paid service offers an expanded content base that also carries a lighter ad load than does basic Hulu, usually two 30-second ads compared to three 30-second ads for Basic.

Subscribers to what was then known as Hulu Plus have, since its inception, complained that they shouldn’t have to see ads for a service they pay for, demanding more of a Netflix or Amazon Prime Instant Video experience.

Hulu, under the leadership of new CEO Mike Hopkins, appears to be ready for change. Whether the ad-free service replaces or comes on top of the current paid and basic model isn’t clear, nor is it guaranteed that the rumors of an ad-free service are true.

But Hulu needs to change to move forward.

Launched in 2008, Hulu to date has, essentially, been left behind by Netflix and even Amazon, which launched in 2011.

While Netflix has topped 65 million subs, and Amazon Prime gains speed, Hulu has yet to reach 10 million, although new CEO Mike Hopkins says the service has increased from 6 million subscribers to 9 million this year.

While Hulu is a member of the Comcast/Disney/21st Century Fox family, but it’s often been treated as an unwanted stepchild. Rumored to be considering an IPO in 2010 that never materialized, it’s also been openly up for sale at least once, but the uncertain future of its programming deals with its parents have made it a tough sell.

Hulu and its owners have often had a rocky relationship, as evidenced by a 2011 blog post from then-CEO Jason Kilar. In the post, Kilar criticized the business models of traditional TV companies, saying “traditional TV had too many ads,” and noting that “consumers want TV to be convenient for their schedules.”

And, he said, traditional, non-targeted ad buys resulted in “many wasted impressions and an often irrelevant experience for consumers.”

Sound familiar?

Disney, at the time, distanced themselves from Kilar’s POV, saying his opinions were “personal and clearly not shared by anyone at Disney.”

Now, however, as Hulu chases the leaders, it’s obvious that it’s time for Hulu to roll out that ad-free option.

But, is it too late to catch up?

In a word, yes.

Hulu is destined to be Netflix’s – and possibly Amazon’s – little brother.
Stay tuned.

Follow me on Twitter @JimONeillMedia and on LinkedIn


SVOD, Content, Live sports
Original content, sports to push SVOD revenue to $120B by 2022
Dec 13 2017 9:00 AM

New research posits that global revenue from subscription video on-demand (SVOD) will increase 88% to more than $120 billion in 2022, up from an estimated $64 billion this year.

The report from Juniper Research also says more than 25% of all global households will have at least one SVDO subscription in five years.

LatAM, SVOD, Mobile
Latin America seeing golden age of TV in form of SVOD
Aug 22 2017 7:30 AM

Globally, subscription video on-demand (SVOD) is on a rocket trajectory and Latin America is deeply in the mix. While Netflix, Amazon and Hulu have been the leaders of subscription video on-demand growth, an increasing array of subscription services – there are more than 100 in the U.S. and Canada alone – are seeing fast subscriber growth and adoption across demographic groups.

SVOD, Pay TV, Millennials, Cord Cutting
Q2 likely to be miserable as operators brace for big customer losses; OTT anyone?
Jul 24 2017 3:00 PM

Could second quarter pay-TV subscriber losses in the United States top 1 million, the highest figure ever? In a word, yes.

The second quarter routinely is a weak one for operators and in the current environment – remember the first quarter saw more than 800,000 subscribers cut the cord, according to Kagan – reaching one million may be an easy task.

SVOD, Operators, Netflix
Should European operators worry about cord cutting as Amazon, Netflix push deeper into their market? Absolutely
May 25 2017 8:15 AM

When the Big Two come to play in your backyard, it’s time to up your game.

Netflix and Amazon have launched a push into Europe that will likely result in some bad nights of sleep for operators, pay-TV channels and broadcasters looking themselves to do more business over the top.