Netflix Inc. (NASDAQ: NFLX) as an online streamer circumvents commercials altogether by sponsoring its own media and delivering on its own platform. Apple Inc. (NASDAQ: AAPL) is developing its Apple TV, which would allow consumers to skip commercials. Now Hulu is joining the pack by allowing its customers to skip commercials altogether just by paying a slight premium.
Hulu announced Wednesday that it is offering a commercial-free option to subscribers. Viewers now have the choice to watch Hulu commercial free for $11.99 per month or with limited commercials for $7.99 per month. Current Hulu subscribers will maintain their existing subscription, but they will have the choice to switch to the commercial-free option at any time for an additional $4 per month.
For viewers who choose to watch content with limited commercials, Hulu will continue to show fewer commercials than scheduled television.
At this point it is worth mentioning that Hulu is a joint venture of Comcast Corp. (NASDAQ: CMCSA), Twenty-First Century Fox Inc. (NASDAQ: FOXA) and Walt Disney Co. (NYSE: DIS). Each as a major player in media has a strong pull, and collectively they are capable of creating content as well as attracting “star power.”
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Recently, Hulu announced a landmark, multiyear agreement with Epix that will bring premium and hit films from Lionsgate, MGM and Paramount to Hulu for the first time. Hulu also signed groundbreaking licensing deals with networks including AMC, FX and Turner, and it acquired the exclusive subscription streaming rights to full libraries of hit broadcast and cable shows, including Seinfeld, Empire, Fargo, South Park, CSI, Brooklyn Nine-Nine, Nashville, Deadliest Catch, The Last Ship and more.
This is the exact opposite move of Netflix, which has actually cutoff its ties with Epix as it continues to pioneer and develop its own content.
However like Netflix, Hulu has made a strong investment in its original programming and has greenlit an exciting slate of originals from popular stars, directors and producers.
Mike Hopkins, CEO of Hulu, said:
At Hulu, we pride ourselves on listening to our customers and giving them the best possible experience. Many of our customers have asked us for a commercial free option, and so today we are excited to introduce just that. Providing more choice for consumers is fundamental to the Hulu experience, in addition to an array of choices in content and devices, our customers can now choose to watch with or without commercials.
Netflix shares were down 4.1% to $101.46 on Wednesday afternoon. The stock has a consensus analyst price target of $118.70 and a 52-week trading range of $45.08 to $129.29.
Apple shares were up 2.8%, at $110.74 in its 52-week trading range of $92.00 to $134.54. The consensus analyst price target is $145.68.
Shares of Comcast were up 1.2% to $55.69. The consensus price target is $70.42, and the 52-week range is $49.33 to $64.99.
Shares of Fox were up 0.5%, at $26.74 in its 52-week range of $22.81 to $39.27. The consensus price target is $37.09.
Disney shares were up 1.2% to $100.66. The consensus price target is $119.85. The 52-week trading range is $78.54 to $122.08.
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