On July 16, The Wall Street Journal reported that Hulu was considering offering an ad-free tier to their service. The service could launch this fall and would have around a $12 to $14 per month price tag, around double the price of its ad-supported tier.
The WSJ reports that this move could come from the growth of ad-free streaming services like Netflix. Netflix's second-quarter financial report showed that it had added 3.3 million new subscribers (0.9 million domestic, and 2.4 million international). Netflix's revenue is also up around 20 percent from the same quarter last year.
With just about every company jumping on board the "on-demand streaming" train, each service needs to find a way to differentiate themselves from the others. Netflix is having success with its large and varied library of titles and original series' such as Daredevil and Orange Is The New Black, Amazon has theirs as part of Amazon Prime, and Hulu offers current and up-to-date T.V. series. One thing that Hulu has that most people don't like is the ads; even though the ad-free tier would reportedly cost a pretty penny, it would tap into a demographic of people that are willing to pay more if it means they don't have to watch any ads. The addition of Showtime content to Hulu also makes a higher cost ad-free tier more worth it to consumers.
Quick TakeOne thing this new ad-free tier could do, if not help it compete with the likes of Netflix, is to put it in competition with cable providers such as Comcast and Verizon. Personally I'd be willing to pay $14 a month for ad-free current T.V. shows as well as movies. Other than sports packages, renting movies, and some T.V. shows, an ad-free Hulu would be a pretty compelling service to compete with cable companies.
If Hulu does roll out a higher cost, ad-free tier would it interest you? or would the higher price tag discourage you? Do you think an ad-free tier could get you to cancel your cable subscription?