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Hulu Launches Ad-Free Option

$11.99/Month Tier Takes More Direct Aim at Netflix (Updated) 9/02/2015 11:00 AM Eastern Last updated at 9/02/2015 12:40 PM

Taking more direct aim at competitors such as Netflix and Amazon, Hulu has introduced a commercial-free plan starting at $11.99 per month, an offering that is $4 more per month than its ad-based subscription service.

 

The announcement comes more than a month after The Wall Street Journal reported that Hulu was mulling an ad-free service under the code name “NOAH” (for “No Ads Hulu) that would sell for $12 to $14 per month.

 

Hulu said current subs will stay on their current subscription plan, which runs $7.99 per month, but will have the option to move to the more expensive ad-free offering. Hulu said the following devices/platforms currently have the ability to switch between Hulu plans: Web browsers; iPhones, iPads and the iPad Touch; Android phones and tablets, Roku boxes, the Apple TV; PlayStation 3 and PS4, Android TV-powered devices, with more to be added to the list "soon." Hulu noted that the ad-load in its traditional package is smaller than what’s offered on scheduled television.

 

Update: Per the new offering’s FAQ, Hulu notes that some specific shows are not included in the No Commercial plan, and “will be noted throughout the signup, switching and playback experience.”  Hulu said those shows can still be accessed and viewed uninterrupted with a short pre-roll and short post-roll ad by customers on the new ad-free plan.  Noting that the list could change, Hulu said those shows include Grey’s Anatomy, Once Upon A Time, Marvel’s Agents of S.H.I.E.L.D., Scandal, Grimm, New Girl, and How To Get Away With Murder.

 

The FAQ also points out that customers who sign up for the new ad-free plan via an iOS device and pay through their iTunes account will be charged $13.99 per month. That $2 per month increase increase is due to “an additional charge due to transaction costs associated with Apple," Hulu explained, noting that those customers can avoid that charge by subscribing directly via hulu.com/start. Also, Hulu subs via Amazon that want the new ad-free option will need to cancel their Amazon-billed subscription and sign up for the new plan via that same Web page. 

 

Hulu has nearly 9 million subscribers, a figure that has jumped 50% year-over-year, but trails Netflix, which ended the second quarter with 42.5 million paid U.S. subs, and more than 66 million worldwide.

 

Hulu, which just struck a multi-year deal with Epix as the premium programmer’s agreement with Netflix was set to lapse, is also looking to boost its subscriber numbers through recently signed distribution deals with MVPDs and ISPs, including AT&T, Cablevision Systems, Armstrong, Atlantic Broadband, Mediacom Communications, Midcontinent Communications and WideOpenWest. Hulu also bundles Showtime’s new standalone OTT service for an additional $8.99 per month. 

 

Hulu said consumer feedback led to the development of the new ad-free offering.

 

"At Hulu, we pride ourselves on listening to our customers and giving them the best possible experience," said Hulu CEO Mike Hopkins, in a statement. "Many of our customers have asked us for a commercial free option, and so today we are excited to introduce just that. Providing more choice for consumers is fundamental to the Hulu experience, in addition to an array of choices in content and devices, our customers can now choose to watch with or without commercials.”

 

Despite the ad-free move, Hulu is also amping up its advertising strategy, announcing last week that it will launch a programmatic platform this fall that will be powered by LiveRail, the ad-tech company that Facebook acquired last year.

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