Hulu has announced that its streaming service will soon ditch the free streaming tier. Users cannot try out the ad-supported format of the service for free before deciding to make a purchase decision. Potential customers will instead have to directly subscribe to the payment-enabled model to make the best of Hulu’s services. According to Variety, Hulu plans to slowly introduce the change over the coming weeks before the free tier is gone for good.
The removal of the free tier will have no impact on the paid subscription tiers. The ad-supported paid model will cost $7.99 per month, while the ad-free version will still carry a monthly fee of $11.99. This will help promote Hulu’s image as a premium video-sharing service, but might deter other users from giving the service a shot. This can be particularly detrimental to Hulu keeping in mind the popularity of video-streaming rival, Netflix.
However, Hulu has also expanded its deal with Yahoo to launch a new streaming site called Yahoo View. The site (view.yahoo.com) is set to have a rather interesting model – the streaming service will air the five most recent episodes of shows from NBC, Fox, ABC and other networks. The episodes will be made available just eight days after the episode in question originally aired on television. Day-after clips will also be posted, while Hulu will also stock entire seasons of Korean drama series as well as anime series.
Variety quoted Hulu Senior VP and Head of Experience, Ben Smith, as saying that Hulu had been looking to shift to subscriptions for a few years now. He feels that the video service now offers enough original content, movies and exclusive acquisitions to make the move. The Hulu service’s free version was, therefore, limiting the content strategy and experience that Hulu wanted to provide to its customers. This indicates that the production of original content was perhaps racking up costs that Hulu had to pay off by forcing users to subscribe to consume content.
The video-sharing service recently sold 10% stake to Time Warner for $583 million. Time Warner is not the only player in the entertainment industry to invest in Hulu; 21st Century Fox, Comcast and Disney all have a stake in the video sharing service. The companies’ investment in Hulu is rather interesting, particularly given that Hulu’s rivals – Netflix and Amazon Prime – arguably offer a better and more expansive array of original programming. But Hulu’s decision to launch a live-TV service next year might have something to do with the investments it has attracted.
It is interesting to note Hulu’s partnership with Yahoo for the Yahoo View channel, particularly since Yahoo is all set to be acquired by Verizon for around $4.8 billion. The deal will be wrapped up by 2017 at the very latest, and it will be interesting to see if it will affect Hulu’s relationship with both companies. Yahoo is Hulu’s “preferred partner”, so one can at least expect Verizon to offer some sort of promotion for Hulu’s services.
Users who want access to free Hulu content can, therefore, get some through Yahoo as well as Comcast’s Xfinit, Time Inc.’s People.com and New York magazine’s Vulture.com. It will be interesting to see whether the lack of free content on Hulu’s main service will push users away or encourage them to sign up for a subscription. With the number of streaming services out there, consumers are really forced to make a choice. And with Netflix boasting of blockbusters such as Daredevil, perhaps Hulu needs an equally big name to draw in audiences.