A longtime point of contention among Hulu subscribers has been the service’s gratuitous advertising. Just like free viewers, paid users have to sit through video ads in-between, before and after, and even during shows. But that may not be the case for much longer: according to the Wall Street Journal, Hulu’s entertaining the idea of introducing a pricier, completely ad-free tier.
The subscription option, reportedly known as “NOAH” (“No Ads Hulu”) internally, would be priced between $12 and $14 per month, the Wall Street Journal reports, and could launch as soon as this fall. But it isn’t intended to supplant the service’s ad-supported, $8 per month tier — sources told the publication that Hulu is searching for ways to “make advertising more relevant to viewers” (likely a indicating targeted ads).
The impetus behind NOAH’s development is the sustained momentum of competing services from Netflix and Amazon, neither of which feature advertising. Hulu’s paying subscribers currently number around nine million, a number dwarfed by Netflix’s global base of 65 million. And Hulu’s projected revenue this year — around $1.5 billion to $1.7 billion — falls short of the $5.5 billion Netflix brought in last year.
That success, some might argue, is partly due to the popularity of Netflix’s original series. Hulu, which is co-owned by network players Comcast, Disney, and 20th Century Fox, has countered in part by shelling out a whopping $180 million for the complete Seinfeld series. In addition, the service has recently inked content partnerships with networks like AMC, Time Warner, and Discovery. However, a breakthrough original series remains elusive. Poor critical reception for its current crop of series hasn’t helped matters — Hulu has yet to garner an Emmy nomination. Meanwhile, Netflix and Amazon nabbed 34 and 12 respectively when the 67th Emmy noms were announced this week.
Hulu has attempted to differentiate itself from the competition in other areas, teaming up with Showtime to offer the premium network’s self-titles stand-alone streaming service at a slightly discounted rate of $9 per month. Hulu also announced an agreement with AT&T that’ll see the service offered through a variety of mobile apps and AT&T websites later this year, and in April, the streamer inked a deal with Cablevision to bring Hulu to the television provider’s set-top boxes.
Those moves point to Hulu’s ambitions for expansion: the service wants to be just as big as Amazon Prime Instant Video and Netflix. But it’s not clear an expensive ad-free subscription tier will help it to achieve that goal. At the reported high end ($14), NOAH verges on premium network territory — HBO Now is just a dollar more at $15 per month. Would TV watchers value ad-free Seinfeld reruns that highly? We may soon find out.
