Hulu's EVP of Sales Peter Naylor on their new ad-free offering
In July, the Wall Street Journal reported that Hulu was exploring an ad-free version of its popular streaming service. Today they've announced that they're adding a "commercial-free" subscription at $11.99/month (versus the $7.99/month that includes commercials). This move puts Hulu in an even stronger position to compete with Netflix, Amazon and the endless other OTT services emerging.
What's even more important is the smart confidence Hulu's SVP of Advertising Sales, Peter Naylor has in how this is a good move for their sales efforts and advertisers. "This is another big announcement from Hulu and we’re excited," he told Found Remote.
One of the factors that drove this decision was research Hulu conducted on consumers attitudes towards advertising. "We conducted research that segmented the world into a spectrum of ad acceptors all the way through to ad avoiders," Naylor explained. "Viewers have varying attitudes towards ads, but less than 10% actively avoid ads. We believe that when given the choice, most viewers will stick with the limited commercial plan."
Naylor explained to Found Remote that this move is going to make the viewers that stick with the commercial option even more valuable to their advertisers. "Now that there’s a choice, the people who opt in to the limited commercial plan are actively opting in to receive ads," he explained. "Advertising’s value proposition is enhanced and viewers get the message that advertising is helping make the service possible. As a result, the Hulu audience we bring to market is even more potent than before we had two plans."
Netflix and Amazon need to watch out, especially as Hulu has recently added Showtime as an add-on in addition to a partnership with Epix that will bring new releases from Lionsgate, MGM and Paramount to their streaming service.
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