Hulu just made a bold move amidst the “streaming war.” The streaming service is reportedly raising its prices because they know people will pay it.
According to Deadline, the streaming service is raising the cost of both streaming tiers, but the cost of the service’s live TV feature and its Disney bundle won’t increase. The increase in price doesn’t come as a surprise for those in the industry. Both ESPN+ and Disney+ increased their prices recently.
Starting on October 8th, Hulu will go from $5.99 a month to $6.99 for its tier with ads. The ad-free tier will also increase by a dollar to $12.99 per month. Deadline reports that this is Hulu’s first change in pricing since a surprising move it took in 2019 when they dropped the basic tier by $2 to $5.99.
Hulu is one of the earliest streaming services. It launched in 2007 and has relied a lot on ads for its success. In terms of ad revenue, the company has made good progress since its beginnings. It’s also one of the first streaming services with the Ad feature. Now, HBO Max and Peacock also have a tier with Ads.
To put in context just how well-streaming services are doing, Total ad revenue this year will likely hit $3 billion. In 2020, Broadcast Ad Revenue was $3.26 billion.
Hulu has More Competitors than Ever
Back in the good ol’ days, you had to decide between Hulu or Netflix. Now, the streaming service world is a mess. With Disney+, Hulu, Netflix, Peacock, HBO Max, Paramount +, Amazon Prime Video, and even Apple TV+, the price of all of these streaming services combined seems to be getting up there with the Cable prices people were running from in the first place.
According to Deadline, Disney has been very forward when it comes to raising its prices. With Disney+ Halfway to their 2024 subscriber goal, they increased their prices by a dollar in the past few months. The Disney bundle on Hulu also rose by a dollar Last March.
Hulu + Live TV increased by a steep $10 in December, bringing the total price to $64.99 a month.
Hulu is looking at Disney’s addition of Hotstar originals and thousands of Bollywood titles as a reason to increase its prices.
Like many services, Hulu has been creating original series and films to drive subscribers to the platform. While Hulu’s originals aren’t always hits, the streaming service struck gold last month with Vacation Friends. The film had the best opening weekend of any Hulu original film and a sequel is already underway.
If Netflix’s model is anything to go by, price increases may hurt a bit in the short term, but ultimately benefit streaming services in the long term. So while Hulu’s price increase is frustrating subscribers already overwhelmed with options and increased prices, it’s definitely not a surprise.