A week after streaming leader Netflix announced price increases, Hulu is notifying subscribers that its Live service will cost more, but its core on-demand service will be less expensive.
The moves come as media companies such as the Walt Disney Co., AT&T, Comcast and Viacom jump into the streaming business, which will force cord-cutting and core-never consumers to make tough decisions about how much they want to spend to get over-the top video and which services they will buy.
Hulu is increasing the price of its Hulu + Live TV to $44.99 a month.
Analysts suggested the previous price of $39.99 was barely enough to cover the fees Hulu was paying out to the 40-plus channels in its bundle when it launched. It has added a dozen channels since then.
Hulu + Live competes with a number of other virtual MVPDs, such as Sling TV, YouTube TV, and DirecTV Now, all of which are trying to lure consumers with prices that are significantly lower than traditional pay TV.
At the same time Hulu is cutting the price of its “core” on-demands streaming service to $5.99 from $7.99.so that it can continue to attract and retain subscribers in an increasingly crowded market. The commercial-free version of Hulu remains at $11.99.
The new prices go into effect in late February.
Last week, Hulu announced that in 2018 its subscriber count increased by 8 million to 25 million in 2018. At the same time, advertising revenues rose 45% to $1.5 billion.
But the growth has come at a cost. Spending on both original and acquired content contributed to huge losses. The higher price for the Live package will help reduce those deficits.
The losses that have been passed on to Hulu’s owners, The Walt Disney Co., 21st Century Fox, Comcast and AT&T.
With Disney about to acquire Fox assets including its Hulu stake, Disney will become the controlling owner. AT&T has indicated that it plans to sell its stake in Hulu.
Last week Netflix announced a big increase in subscribers, but also unveiled plans for its biggest price increases ever.
The price increases were viewed positively by Wall Street, which is counting on Netflix’s estimate that the rate at which its revenue increases will surpass its ever-rising cost of programming. But some surveys showed that the price increase could cause about 8% of Netflix’s current subs to drop the service.
Here is a note from Hulu explaining the new prices:
New Hulu Pricing Options
Over the past year, Hulu has added thousands of exclusive TV episodes and movies, launched nearly a dozen additional popular live TV channels - including The CW, Discovery Channel, TLC, Animal Planet and ABC News - and upgraded the technology platforms to support more devices and provide superior quality to our viewers.
With more than 85,000 episodes of on-demand television -- more than any other U.S. streaming service -- as well as thousands of movies and more than 60 popular live television channels, Hulu makes it easy for TV fans to get the most complete television experience.
Today, we’re announcing updates to our pricing options (that will go into effect next month*) to allow current and new subscribers to choose the best Hulu experience for them.
Hulu: $5.99 per month
Hulu subscribers can stream more than 85,000 episodes of on-demand television, thousands of movies and award winning Hulu Originals with commercials, now for $5.99 per month. Fans can enjoy current hits like The Good Doctor, Killing Eve, This is Us,Atlanta and Grown-ish as well as award-winning Hulu Originals like The Handmaid's Tale, Marvel’s Runaways, Future Man and Castle Rock. Plus, Hulu is the exclusive streaming home to every season of beloved and current series including ER, Lost, King of the Hill, 30 Rock, Family Guy, Seinfeld, South Park, Curious George and many more.
Hulu (No Ads): $11.99 per month
The Hulu (No Ads) plan still offers the same massive library of on-demand TV and movies, with no commercials, for $11.99 per month.
Hulu + Live TV: $44.99 per month
As the ultimate combination of on-demand and live TV, Hulu + Live TV features more than 60 live sports, news and entertainment channels to stream on virtually any living room or mobile device, PLUS the more than 85,000 episodes of television on demand and thousands of movies in the core Hulu plan. Only Hulu offers this complete streaming television experience, all in one place.
With Hulu, TV fans can easily switch plans at any given time. Want to watch the current season of your favorite sport? Switch to Hulu + Live TV. Don’t want to pay for Live TV in the off-season? Switch back to Hulu and catch up on your favorite shows & movies. Want to binge without commercials? Switch to Hulu (No Ads). It’s that easy. And with any Hulu plan, fans can easily add HBO, Showtime, Cinemax or Starz whenever they like.
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.
* Hulu’s new pricing will go into effect beginning February 26 for new subscribers. Existing subscribers will see these changes reflected in their subsequent billing cycle after February 26.