Hulu May Create an Ad-Free Tier, Reports the Wall Street Journal
In the subscription video-on-demand (SVOD) world, Hulu runs a distant second behind leader Netflix. One reason non-subscribers often cite for avoiding Hulu is that they don't want to pay for a video service and still have to sit through commercials. However, they may soon be able to experience Hulu commercial-free.
According to a news report in the Wall Street Journal, Hulu is considering adding an ad-free tier of service for customers willing to pay a little more. Hulu currently charges $7.99 per month, but would likely price the ad-free option at $12 to $14 per month. The new tier could debut as soon as this fall. The Journal cited "people familiar with the matter" as its source.
The proposal is codenamed NOAH, the Journal reports, which stands for No Ads Hulu.
How the new tier would be received is a matter of much speculation. While an ad-free tier could help Hulu compete against Netflix and Amazon Prime, it would be priced far higher than either, closer to the prices charged by premium movie services HBO and Showtime.
Hulu also has to consider how the advertising industry would react. By showing commercials, Hulu offers brands a way to reach desirable young cord-cutters who don't see broadcast TV commercials. In an advertising column, the Wall Street Journal points out that the high price for the ad-free tier suggests that Hulu doesn't want many subscribers to take the option.
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