In a compromise of sorts with its television network parents, Hulu is lowering the price of its TV subscription service to $7.99 a month from $9.99.
The paid service, Hulu Plus, allows access to fuller catalogs of TV shows than the free, ad-supported Hulu provides. It started in invitation-only “preview” mode at $9.99 a month in June. Two weeks ago, it was offered to all at the $9.99 price. On Wednesday the “preview” was lifted, Hulu said, and the lower price was instituted.
“We’ve always been committed to providing our users the best value possible in all of our offerings,” Jason Kilar, the chief executive of Hulu, said in a blog post on Wednesday.
According to All Things D, Mr. Kilar had pressed for a further price reduction, to $4.95 a month, but some of the stakeholders in Hulu balked. Hulu is jointly owned by the parents of NBC, Fox, and ABC, as well as a private equity firm.
The $7.99 price makes Hulu Plus more competitive with Netflix, which streams films and some TV shows and mails DVDs for as low as $8.99 a month. Netflix is reportedly testing a $7.99-a-month streaming service.
Even before Netflix and Hulu were competing for subscribers, they were competing for content. Recently Netflix added the complete 36-year catalog of “Saturday Night Live” episodes, something Hulu says it will add by the end of the year. Comparisons to Netflix continue to confound Hulu; as one blogger, Adam Frucci of Splitsider, put it Wednesday, “for about the same price as Netflix’s streaming service, you get a fraction of the content.”
Hulu says it is unique in that it offers more recent episodes of shows, while Netflix generally carries past seasons. The main sales pitch on the Hulu home page on Wednesday said its service included “exclusive access to full current seasons” of “Glee,” “Modern Family,” “House,” and “dozens more.”
Still, it appears to be a hard sales pitch to make. For the holiday season, Hulu is promoting free trials for new subscribers and for people who buy certain Internet-connected devices.
Already, Hulu Plus is accessible through PlayStation 3, the iPhone and the iPad. On Wednesday, an Internet set-top-box company, Roku, said it had added support for Hulu Plus. Hulu says support for other devices, like Xbox 360, Blu-ray players, TiVo, and certain TV sets is forthcoming.
The company is also setting up a referral service to “spread the word” about the service. Subscribers will gain free weeks by referring their friends.
Existing subscribers who were able to subscribe to the limited “preview” of Hulu Plus over the summer were told in an e-mail that their accounts would be credited with $2 “for each month you’ve been a subscriber.”
Hulu has declined to say how many people have signed up for the subscription service.
When it was announced earlier this year, the service was perceived to be a tacit acknowledgment of the tremendous pressure that Hulu’s ad-supported business model has been under. Hulu is profitable, but because those profits are split among dozens of content providers, no one company is making a meaningful amount of money from the Web site.