Dive Brief:
- Project NOAH – or, "No Ads Hulu" – is an initiative at the online streaming video service to add a premium, ad-free tier to its user options.
- The move would match Hulu competitors Netflix and Amazon Prime that already exist completely ad free.
- The cost for the ad-free tier hasn’t been determined but is likely to be $4 to $6 more per month than the current ad-supported subscription at $7.99.
Dive Insight:
Hulu, the streaming video service, is working on "Project NOAH" to add a new premium subscription tier to the service expected to cost $12 to $14 per month. Offering users an ad-free experience would help Hulu compete more directly with its rivals Netflix and Amazon Prime, both of which are ad free at the basic subscription level. Hulu also offers a free version that includes more ads than the $7.99 basic tier, which was originally called Hulu Plus, but was rebranded in April as just Hulu giving the free and basic subscription versions the same name.
Hulu has yet to comment on the report. The move would be a sudden shift in the company's ad strategy, which has been notoriously ad-friendly as "a company that has boasted offering advertisers an essential toehold in the shift to streaming," Adweek describes it.
In fact, Peter Naylor, Hulu SVP for sales, told Adweek earlier this year, "It's getting harder for marketers to reach their target audiences when they spend more and more time in front of screens with no ads. So we're seen as a really, really nice place to place some bets."
Hulu has nine million subscribers (1.9% market share) compared to Netflix’s 65 million and accounting for 36% of peak Internet traffic in North America last spring.
