Hulu today announced that the company is ending the free, ad-supported tier of its streaming service and focusing on an all-subscription model that will more closely align it to rivals Netflix and Amazon Prime (via Variety). Hulu's free service -- which let users watch the most recent episodes of shows after they aired live on TV -- will still continue, but is being transitioned to a new platform called "Yahoo View," thanks to a distribution partnership between Hulu and Yahoo.
In the free-to-use site Yahoo View, users will be able to watch the five most-recent episodes of shows from networks like ABC, Fox, and NBC, but will now have to wait eight days after they originally air. Yahoo View will also provide clips previewing upcoming episodes and entire seasons of anime and Korean drama series. Users can expect Hulu's free service to be phased out "over the next few weeks."
Hulu senior vice president Ben Smith said that the main reason behind the move was that the company's free service "became very limited and no longer aligned with the Hulu experience or content strategy." With the elimination of the ad-supported tier, users will have just two options to watch Hulu: its basic $7.99 per month service with commercials, or a higher-tier $11.99 per month option without commercials.
“For the past couple years, we’ve been focused on building a subscription service that provides the deepest, most personalized content experience possible to our viewers,” Hulu senior VP and head of experience Ben Smith said in a statement. “As we have continued to enhance that offering with new originals, exclusive acquisitions, and movies, the free service became very limited and no longer aligned with the Hulu experience or content strategy.”
For now, Yahoo View is available only on the web, but the company said that mobile apps will be coming soon, although no release window was given. Since Yahoo shuttered its digital online video service, Yahoo Screen, earlier in the year, the acquisition of Hulu's former free content is expected to help bolster Yahoo's standing as a contender in the ever-expanding online streaming competition.
For Hulu, the move comes just under a week after Time Warner bought a 10 percent stake in the company to join Disney, 21st Century Fox and Comcast/NBC Universal as shareholders. Looking forward, Hulu is also prepping a live TV streaming service for sometime in 2017, which would add another subscription tier onto its streaming options with a service that focuses on quality over quantity, since the company "isn’t looking to offer all the hundreds of channels found in the traditional cable bundle."
Top Rated Comments
The free tier is how Hulu started and it should re-evaluate their core audience (college students and cord-cutters).
I pay for the "ad free" tier. Know how many ads I have watched since it started. None. Guess I just don't watch the like 5 shows that they fall into.
For my family it isn't a competitor for Netflix but compliments it. The two together we have plenty to watch with no need for cable.
I hate cable companies as much as the next guy, but the content producers charge a lot of money for distribution rights. For instance, Disney charges over $6/month to the cable company for just ESPN. Furthermore, Disney often requires cable company to bundle (at additional cost) less popular Disney contents for rights to carry ESPN. And let's not forget that it's these content producers that tackle commercials, not the cable company.
Heck, even free over-the-air local channels charge cable companies for distribution rights.
And in turn, cable companies require certain protections for agreeing to such term, which is why streaming services have ads, delays, and blackout for local sports team.
Furthermore, it is also why cable companies are buying contents left and right (e.g., NBC Universal and Comcast).
And things change. Free tiers don't really make money and they are a waste of time. Spotify's paid users are pretty much subsidizing the free tiers, for example.
Netflix is the most successful streaming service with no(zero, zip, nada) ad-supported free-tier. Almost every person I know has some access to a Netflix account, including college students. As a for profit company, free tiers are was a waste time, money, and energy. Private companies aren't charities.