Hulu is phasing in a significant rate hike for its skinny-bundle live TV service, to $44.99 a month from $39.99, but at the same time will lower the price of its signature SVOD offering to $5.99 from $7.99.
The ad-free version of Hulu’s SVOD service will remain $11.99 a month.
The new pricing scheme will go into effect February 26 for new subscribers, while current subscribers will pay the new rates starting in the first billing cycle after February 26.
Earlier this month, Hulu announced it has surpassed the 25 million mark in total subscribers to its live TV service and the SVOD plan, a 48% year-over-year gain. The company is starting to place more emphasis on live TV, with competitors like YouTube TV, DirecTV Now, PlayStation Vue and Sling all jockeying for position as more subscribers leave the traditional pay-TV bundle.
Hulu last fall confirmed it has passed 1 million live-TV subscribers. While it still trails DirecTV Now and Sling, it has grown steadily since launching in May 2017. YouTube is approaching 1 million, while PlayStation Vue and FuboTV are farther back in the pack.
The pricing changes are a bet that the live TV package — which also includes access to the on-demand service and its originals and 85,000 on-demand TV episodes — is a robust enough experience to merit the higher price point. Hulu has also previously run tests and targeted promotions with its basic service at $5.99 and those customers have been less likely to drop their service.
In the world of skinny bundles, churn is a very real concern given the lack of two-year contracts and equipment that are the hallmarks of the traditional pay-TV universe. As viewers hop in and out of services at the tap of an app, companies are looking for ways to make their offerings stickier.
The streaming outlet is currently a joint venture in which NBCUniversal, Disney and Fox have 30% stakes (and WarnerMedia the remaining 10%). After the closing of the Disney-Fox deal, Disney will control 60% of Hulu.