- Hulu will lower price of ad-supported subscription to $5.99/month days after competitor Netflix raised most popular subscription plan
- Hulu is owned by some of Netflix’s largest direct competitors, who may be trying to take market share from the leader
Hulu’s ad-supported plan will be $5.99, down from the current $7.99, beginning February 26th. The company announced this drop in price days after Netflix (NFLX) rose prices across all its plans.
Unlike Hulu’s ad-plan, Netflix’s content is free of ads. Hulu is using cheaper pricing to create a cost divide that might lead to consumers tolerating commercials. Hulu revealed earlier this month that it ended 2018 with over 25 million subscribers, less than half of Netflix’s 58 million US-based customers.
Hulu ownership breakdown is Disney (DIS) at 60%, Comcast (CMCSA) at 30% and AT&T’s Warner Media owning the remaining 10%. In addition to Hulu, all these companies have their own streaming service that competes with Netflix, so the Hulu price drops could be a strategic move to overthrow the current market leader.
Article by: Mick Ross
Mick is currently a full-time investor and formerly a buy-side analyst (2yrs) covering healthcare companies. Before that, he was a salesperson at a bulge-bracket firm, based in Dallas, Texas. Mick blogs to clarify and synthesize his investment thought process and to elicit feedback; additionally he likes to connect with other investors and swap ideas.