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Watching my favorite network shows on Hulu is a lot more pleasant and efficient than any other streaming method. Hulu gathers all of my favorites in one place, recommends new shows, has an extensive on-demand library, and presents network shows with less than half the commercials as watching it live or recording it myself. I don’t need to set the clock or maintain a DVR watch list. All these benefits are included for about the same cost per month that we used to pay Spectrum for the convenience of renting a DVR.
Television shows used to command the entire nation’s attention at once. Families would gather together to watch Ed Sullivan via a live broadcast with four to five minute commercial breaks. Those breaks allowed viewers to step away without missing the main event. Today, excluding sports events, viewers watch TV Everywhere – any device, anytime, anywhere. On-demand viewing, fast-forward, and pause functions keep us from missing the action. Without the need for prescribed breaks, the commercials are disruptive and intrusive.
The entry-level tier of Hulu isn’t commercial-free, but it shows fewer advertisements than traditional broadcast. For $5.99 per month, Hulu limits ad breaks to 90 seconds. This is a better ad-to-content ratio than you get on most streaming services, and definitely better than the four minutes of broadcast ads on live TV. The limited ad segments are more palatable for viewers because it’s easier to watch passively than the effort required to skip.
Streaming television complicated things for advertisers, so their first reaction was to saturate targeted demographics with commercials. That left streaming viewers watching the same ad over and over, sometimes multiple times in a row. Nobody wants to see the same drug advertisement with gory side effect warnings three times in a row.
Unlike many other ad-supported streamers, Hulu limits repeat commercials while you watch a show. Until the advertisers embrace the complexity of the streaming model, streaming content from a website or on individual network apps leaves you open to repeated ads. Using a single interface like Hulu limits the barrage of a repeated commercial.
Hulu has a larger content library than Netflix, so viewers are likely to find new and old episodes of their favorites. I’m not a huge fan of Hulu’s interface, but it’s better than juggling multiple streaming apps or websites to find the content. Hulu lets you build a watch list of shows you like, but also offers up recommendations. One of my favorite features is the ability to turn down a suggestion so it won’t appear anymore. Recently the algorithm tossed me The Kids Are Alright, a show I didn’t know I would love until it showed up in my list. Unlike the old days with a cable DVR, if I find a new show on Hulu, it’s likely to have the full season on-demand so I was able to catch up from the beginning.
Hulu’s massive library and subscriber base is enough to make it compelling, but the service offers more to viewers. The top-tier service offering is the skinny bundle service which streamers choose to replace a cable subscription. Hulu + Live TV is affordable, with more local channels than any other low-priced skinny bundle streaming service. It’s the second most popular live TV service, with an impressive 2+ million U.S. subscribers at the end of 2018. It works with all of the most common streaming devices, like Roku, Amazon Fire TV, and Apple TV. Viewers have access to Hulu’s extensive on-demand library and can record shows and movies to watch on the cloud-based DVR.
Other than Netflix, no streaming service comes close to Hulu’s reach. Hulu is already up to 28 million subscribers, but it’s possible that Hulu’s inexpensive entry-level product could grow to serve a subscriber base as big as Netflix.
Disney owns 70% of the company and is in negotiations to purchase the outstanding 30% from Comcast. Disney is lagging behind in the streaming industry, but has deep pockets to make up for lost time. Full ownership gives Disney more reasons to help Hulu succeed and it delivers an asset they didn’t have – a live TV service that completes Disney’s content and delivery systems for a relatively small investment.
Disney recently announced its own streaming service, Disney +, would launch in November with a $6.99 per month price tag. It was initially unclear how Hulu would position itself in the Disney ecosystem, but having the backing of the powerful media company will definitely benefit Hulu. For example, Disney is already talking about offering Disney +, ESPN + and Hulu as a bundle.
The average non-sports broadcast show no longer pulls in the entire nation. In fact, Nielsen ratings show that all four major broadcast networks are losing 18-49 year old viewers. Watching TV has changed so much with the advent of streaming that it’s plausible to suggest someday live TV might consist purely of sports and news while streaming services cover entertainment.
It might make sense long-term for Hulu to go fully ad-supported for the lowest tier. It’s a basic supply and demand equation. According to Variety, Hulu reeled in $1.5 million in ad revenue for 2018. With 28 million subscribers at $5.99 per month, they would need to replace $1.75 billion currently coming from subscriber revenue. By contrast, the US television advertising market is about $70 billion. By dropping their monthly fee for the entry level tier, they could double their subscribers to 55 million and grab 5-10% of the TV ad budgets up for grabs.
Hulu’s entry-level package delivers a truckload of convenience for only $6 per month. It’s about the same cost we used to pay for a DVR rental from the cable company, but it’s got a lot more features. Hulu offers an extensive streaming library and most broadcast network shows on-demand with commercial breaks of less than 90 seconds. I’m eager to see how Disney will shape the future for the runner-up streaming service.
Megan Southard is a writer, mom, technology enthusiast, and movie junkie. She dreads the day her kids have to explain gadgets to her and is old enough to say, "I was the remote for our TV growing up."
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