Hulu Finding Success with Ads, Other Services to Follow?

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While no one is a fan of sitting through three to five-minute commercial breaks on regular cable, it seems a majority can stomach the ads 90 seconds at a time. At least, that’s what Hulu is finding with their most popular service. Let’s take a look at Hulu’s 90-second ad break service and what it means for the future of streaming.

How Many People Use Hulu?

With successful shows like The Handmaid’s Tale and Casual, as well as the deep pockets of Disney backing it, Hulu is quickly becoming one of the top streaming services. While Netflix is still deemed the top of the pack, their reign is sorely in jeopardy.

Currently, Hulu has over 82 million viewers. Variety published an article that covered a discussion they had with Hulu’s senior vice president and head of advertising, Peter Naylor. Naylor confirmed that 70% of their subscribers all have Hulu’s basic package, to the tune of $5.99 per month.

Hulu’s basic package comes with an ad before the show, and 90-second ads three to five times during a show. It seems the number of ad breaks depends on how long the episode runs and how popular the show may be. For instance, you can expect a lot more commercials during How to Get Away with Murder than a D-list horror movie.

Hulu is working with sponsors to make these commercials more viewer-friendly. They’re pitching a new strategy that after a person watches two episodes, the next one is on a sponsor, after a 90-second ad from that particular sponsor.

For those who don’t want commercials, there is a tier at double the cost. The Hulu no-commercial package is $11.99 per month.

How Many People Watch Ads on Hulu?

While Hulu has 82 million viewers, they have around 28 million subscribers. 26.1 of these subscribers pay $5.99 per month. Another 1.3 million are in a promotional period. Therefore, they’re either in the seven-day free trail window when the data was procured or the person had a special promotion that allowed them free Hulu. Part of that data may be Sprint customers.

Currently, Sprint is offering to cover your $5.99 Hulu subscription if you are a customer of the phone carrier. In lieu of a free basic Hulu account, you can opt for $5.00 discount on Hulu with Live TV instead.

With all these eyes on Hulu, the company is seeing a lot of rewards in terms of ad revenue. Hulu noted that of the 82 million viewers (profile accounts on a paid subscription) they have, 58 million watch their ads.

Furthermore, the ad-supported service has grown $42 each year. That statistic means that the number of viewers watching ads has jumped 82% every year! This is why Hulu raked in $1.5 billion in ad-supported revenue in 2018. It’s also why Netflix may need to rethink their strategy.

Will Netflix Get Ads?

It’s hard to scoff at $1.5 billion, especially when you’re losing content left and right and increasing prices to create original content. We’re talking about Netflix.

Analysts predict Netflix will have no choice but to succumb to running ads in the future.

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