Last summer, Hulu started working on Project NOAH after realizing people want to stream video without advertisements dropping in during binge-watching sprees. Then, in September, the video streaming service introduced commercial-free viewing by hiking up subscriptions to $11.99 per month. While it still exists, the $7.99 per month option doesn’t remove commercials. So premium subscribers were given the option to decide whether or not an addition $4 per month is worth not having to sit through the stuff that really generates Hulu’s revenue.
Hulu’s owners — Comcast, 21st Century Fox, and The Walt Disney Company — all have a deep history in the television industry. The ad-free plan was met with resistance by those companies because of the value they see in advertising sales; therefore, removing commercials, at least to them, was seen as a big potential threat to Hulu’s core business. But it turns out the ad-free plan hasn’t damaged Hulu’s ability to sell advertisements.
Mike Hopkins, Hulu CEO, spoke at the Code/Media Conference on Thursday and part of his time on stage was spent covering the status of Hulu’s business now that an ad-free plan is available. Since launching the ad-free plan in September, Hulu’s ad sales have grown by 30%. Hopkins said Hulu now has two types of users known as “ad-avoiders and ad-accepters,” and the former is the one the service couldn’t get hooked previously. Despite the ad-free plan being offered, Hopkins added that the majority of subscribers accept viewing commercials.
Room for growth could come from partnering with other services and offering them to Hulu subscribers as add-on packages. In June, Showtime content was added to Hulu at a discount. Hulu subscribers can get Showtime content on-demand for $9 per month while Showtime normally charges $11 per month.
Hopkins would not comment on Hulu’s plans to expand internationally. The Hulu CEO did respond to a question about the possibility of Time Warner, another media giant, buying a piece of Hulu. Hopkins pointed to the “great operating relationship” between them, but he did not directly say if the two parties were working on a deal. Hulu should get to work on selling part of itself to Time Warner because a deal would add content from TNT, TBS, Cartoon Network, and other properties. HBO could also be added as an add-on package for Hulu subscribers.
Via: Variety
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