Original: Viewers are more selective as Hulu raises prices this holiday season.
After Hulu announced that its prices would increase at the turn of the fiscal year, many viewers expressed outrage, particularly over the ad-supported tier hike. Despite a robust advertising schedule embedded in its programming, Hulu’s ad-supported tier will increase along with the ad-free supported plan for all subscribers by the close of October. The streamer’s prices began increasing for some viewers in the last few weeks.
Hulu raises prices and social goes off
No surprise here. Hulu is the 5th streamer to raise prices this year, which has pushed viewers to ask themselves if the carte blanche approach to streaming services makes sense in 2022.
What may be most striking about the price hike is the value Hulu puts on its advertising program. Given that American viewers spend around eight hours a day streaming (on average), this means that the most valuable customers Hulu has could be spending 240 hours a month on the platform, which would put ad viewing at around 2.4 hours (very rough guess). That’s only worth $1?
And yes, we’re oversimplifying it, but the math can’t be that much more complicated at a very high level. Even in publishing, 1,000 clicks (far less interaction than several minutes of engagement during ad breaks) can be worth between $1 – $20 depending on the advertiser, so how does the $1 discount a month add up for Hulu and it’s viewers who spend hours on the platform?
For many on Twitter, the math didn’t.
Honestly, we don’t know who to feel more sorry for; Hulu for building an ad-supported plan for cost-conscious customers and still getting heat on Twitter, or viewers whose time is apparently worth $1.
But we digress.
Hulu price changes
Hulu is going to increase its ad-supported plan from $6.99 to $7.99 per month. Hulu’s ad-free plan will now cost $14.99 per month instead of $12.99 per month. Hence, the ad-free plan is increased by one dollar, and the ad-free plan gets a two-dollar price increase.
As of now, Hulu TV bundles cost the same. However, the company has announced that we will see a price increase to these bundles by the close of the year as well.
The basic bundle, which includes Hulu Live TV with ads, Disney+ without ads, and ESPN+ with ads currently cost $74.99 per month. However, the company is said to be working on a package that includes all three services without ads for $82.99 by Christmas.
Again, if this is true, the ads appear to be worth just a few dollars per month, so why even have them?
This isn’t the first time we’ve seen hike rates. Earlier this year, Netflix also increased the prices of their subscription plans in the U.S. and introduced a lower tier for ad-supported programming (going in the opposite direction). Of course, Netflix’s change was likely a response to the run on its stock and password sharing issues. Overall, however, the cost for Netflix has continued to rise as well.
But as Hulu raises prices, what does that mean for you?
Well, in short, it means that you’ll be paying $7.99 per month for the ad-supported tier and $14.99 per month for the ad-free tier. But in the grand scheme of things, questions are starting to bubble up across the industry about saturation. Higher costs also get passed down to the consumer. And they’re coming in every direction at this point.
And while the company has millions of customers that will be impacted by the change, we can’t imagine an extra dollar doing much for the streamer’s ability to add new programming or offset development and R&D costs. The hike was likely spurred by inflation.
The price increase is not insignificant to many viewers, but that said, we don’t anticipate it being enough to push a substantial number of subscribers away, yet.
The real challenge in the coming years will be retaining viewers on a consistent basis. It’s getting more competitive at a time when budgets are getting tighter. With Netflix offering $20 packages, Hulu at $15 (or $80), Amazon at $10, HBO Max at $10, high-speed internet, cable, mobile data, movies, the list goes on, who can afford $400 a month entertainment budgets?
Are we not yet entertained?
Summary
While it may be a shock for some viewers to see another increase on their credit card statement this month, it is very unlikely that when Hulu raises prices, much will change. Expect more in 2023. The bottom line is that the streaming wars are ongoing and consumers are having to learn how to be agile and flexible with their entertainment choices. We have more choice, but it comes at a cost.
Viewers simply can’t pay one bill and get access to it all anymore. And just buying the farm isn’t the solution either. Where viewers could afford the carte blanche approach at $5 per month, no one is going to pay $20 a month for each. Pressure is building; expect some major changes to the streaming industry in the next 12 – 24 months.