OnDemand WTP Pricing Research

Why Hulu Changed Its Pricing Strategy | Market Realist

Currently, Comcast (CMCSA) has a 30% stake in Hulu, while AT&T’s (T) WarnerMedia holds a 10% stake in the OTT (over-the-top) service. The Walt Disney Company (DIS) and 21st Century Fox (FOXA) hold a 30% stake each in Hulu. However, Disney’s share in Hulu will come to 60% after the completion of its acquisition of 21st Century Fox. Now let’s look at the reasons behind Hulu’s change in its pricing strategy.

The rationale behind the new pricing
One of the reasons behind Hulu’s lower price for its ad-supported streaming package could be that the service wants to attract more viewers, especially considering Netflix’s recent price hike. This move could also result in more advertising revenue for the service as more viewers may subscribe to Hulu’s ad-supported streaming service. According to Hulu, its advertising revenue rose year-over-year to 45% in 2018 and reached ~$1.5 billion.

Hulu’s move of raising the price of its live-TV package comes at a time when its live-TV offering is proving to be extremely popular. According to a FierceVideo report from last year, citing a report by Strategy Analytics, Hulu’s live television offering could have reached 1 million subscribers.

One of the major reasons for the popularity of Hulu’s live-TV could be that news and sports programming continue to attract more viewers, and currently, other streaming services like Netflix do not offer these programming genres. According to Hulu, around 75% of its live-TV subscribers prefer to watch sports. Considering these statistics, the rise in price for Hulu’s live-TV offering is unlikely to make a dent in its popularity.

Read complete article here:

What Launch of Disney+ Means for Netflix.

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