We shared news about Hulu’s price cut back in February, and a partnership with Spotify to offer both services for a reduced price earlier this month. Those changes have helped to increase Hulu’s subscriber count and with more subscribers comes more ad dollars.
According to a forecast from eMarketer, Hulu’s ad revenue is expected to increase by 22.7% from 2019 to 2020. With that increase, the ad revenue will reach above $2 billion.
The price decrease was a strategic move from the company, especially coming right after the price hike from Netflix. Monica Peart, senior director of forecasting at eMarketer commented that “In such a competitive video streaming landscape, Hulu cutting prices for its low-tier ad-supported streaming subscription will almost certainly increase viewership, attracting those who had been on the fence about having the entry-level Hulu option.”
Surveys show that viewers are much more likely to have a more positive attitude about ads on a streaming service if they feel like they’re getting a good deal. In an eMarketer survey, 56% of respondents said they don’t mind seeing ads if they’re paying a reduced fee.
One change we’re likely to see soon is a static ad when TV is paused. While viewers still prefer services that are completely ad-free, Hulu is counting on its lower price point to continue drawing in subscribers to increase ad revenue.
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