Did Hulu Just Price Itself Out Of The Live TV Race?

Hulu with Live TV Android TV 17

Hulu + Live TV will cost you more starting from next month.

If it wasn't intentional, the timing here, is at the very least, interesting.

So interesting that it's raising the question of whether Disney Hulu has now priced Hulu + Live TV out of the market?

Timing is everything

Timing is indeed, everything. That's even more true when you are talking about raising prices. This is something you know you have to do, but getting the timing right can make all the difference.

Take YouTube TV, for example. YouTube TV has not escaped price increases this year and it's hardly the cheapest service around right now. Currently, it will cost you $50 to sign up. If you then want access to The Handmaid's Tale and other Hulu content, you'll pay $6 more, totaling $56.

With Hulu + Live TV only costing $45 per month, and that price including the $5.99 Hulu subscription, the value on offer was obvious. It's not only cheaper than YouTube TV, but includes more.

However, when YouTube TV announced its price rise, it cleverly waited until it could confirm it was also expanding the channel lineup.

It was basically a "we're raising prices but…." announcement and it worked. You were suddenly paying more but you were also getting more. The value had not changed.

What Hulu has now done is wait until quite a few people have taken advantage of a Disney+ bundle option to announce the increase. A bundle option people took advantage of to save money.

This was Hulu's first mistake. To some, it's straight up baiting and switching.

Hulu should have announced the price rise sooner

What Hulu should have done is announce the price increase first. That would have given the service the opportunity to do a "but" announcement like YouTube TV did. Something along the lines of "we're raising prices but you can bundle it with Disney and SAVE."

Not only did Hulu miss the opportunity to soften the blow of a price increase, if anything, this is likely to make some people feel genuinely conned. Especially, those people who in the last few days have bundled their packages together.

For those subscribers, here's my take on what's just happened.

Hulu: "Hey, do you wanna pay more overall but add Disney to your Hulu plan? Come on, it's Disney. We'll even throw in ESPN+."

Subscriber: "Let's do it."

Hulu: "Great! We've changed your plan and the additional charges will be added to your next bill. Now that's settled, we're increasing the price of your Hulu + Live TV plan."

Doesn't sound right, does it? Especially when the company actually makes the point in the announcement that "price changes are never easy to stomach."

But here's the thing. Besides not sounding right, Hulu might actually be shooting itself in the live TV foot by choosing now as the time to raise prices.

Disney+ bundle more powerful than Hulu bundle

What has likely helped the success of Hulu's live TV service is the bundling of a standard Hulu subscription. As already mentioned, that's automatically a $6 per month saving compared to subscribing to another service and then adding the $6 Hulu sub on top.

But that was all before Disney+ came along and changed the game.

Disney Plus vs bundle 01
Disney+ vs Disney+ bundle

Now, you can get Disney+ bundled with Hulu and ESPN+ for $12.99 per month. If you were to subscribe to these three services independently, you'd be looking at $18 per month.

If you're a current Hulu + Live TV subscriber then the Disney+ bundle makes little sense as you're already getting standard Hulu for free.

That's exactly why Disney will discount the cost of a standard Hulu subscription from the Disney+ bundle price for existing live TV subscribers.

For example, if you're currently paying $45 for your Hulu live TV sub then you'll only be charged $7 per month extra for the bundle. That's for Disney+ and ESPN+.

With the price increase now coming, that makes it $62 per month.

The problem Hulu now faces is that it has now lost its added-value status.

Take YouTube TV, for example, again. Now, you can get a YouTube TV sub for $50 per month and couple that with the Disney+ bundle and gain access to Disney+, Hulu and ESPN+.

Yes, the total will come to $63 and yes that's a whole $1 more than the Hulu route, but at this price, that $1 is not hugely important. Especially considering YouTube TV offers more features, including unlimited cloud DVR.

Before, the difference between a YouTube TV with standard Hulu sub compared to a Hulu + Live TV with Hulu sub was $11. Thanks to the Disney bundle, it's now $1.

Hulu + Live TV has officially just lost its edge in the market.

Again, timing is everything

Adding to the timing point, it is not only Disney+ that happened this week.

A new report from MoffettNathanson indicated Hulu had finally overtaken Sling TV as the service with the most subscribers.

This was important. If correct, it marked the first time another service had overtaken Sling TV.

Although the figures are based on estimations and therefore liable to being inaccurate, Hulu seemed to confirm as much in the increase announcement.

Hulu said its live TV service "has grown to become the most popular live TV streaming service in the US."

So Hulu certainly seems to think it's in the lead and again, this is important. That "most popular" tag can do wonders for a service. News outlets like us continue to use it when mentioning the service. Likewise, when consumers are looking for a new service, "most popular" can go a long way to convincing them. Everyone can't be wrong, right?

While news articles tend to focus on who has more subscribers out of Hulu and Sling TV, the same MoffettNathanson report specifically honed in on why both services were doing so well. The reason suggested for both services was how value-focused they are.

Once again, Hulu appears to have just changed that. Well, Disney has with its bundle.

Again, again, timing is everything

If I've yet to convince you on how Hulu made a mistake with the timing, then let's talk about PlayStation Vue.

Sony has confirmed PlayStation Vue will close in January, 2020.

While it might not have the millions of subscribers Hulu and Sling does, it still has a decent number of subscribers.

A number that's now in need of switching, and switching before the end of January.

PlayStation Vue closing
Hulu costing more when PS Vue customers need a new service

Sony only announced the closure at the start of November and this gave Sling TV and Hulu + Live TV – the two most-popular and best-value alternatives – ample time to convert those subscribers to their subscribers.

So what does Hulu do with its infinite wisdom? Two-weeks into that PlayStation Vue transition it announces a major price increase. Remember, that's also days after the Disney+ bundle launches negating Hulu + Live TV's $6 per month saving.

To be clear, most of those PlayStation Vue subscribers are still within their current billing cycle. For most of them, Hulu has announced this price increase before those PS Vue subscribers are actually ready to switch.

While you could argue that's a good thing. A sign of Hulu being transparent before PS Vue switchers, switch. I'd argue transparency wasn't much of a concern when it came to the "bundle your Hulu + Live TV with Disney+" talk, was it?

Cost more matters more than ever

Now, I'm not saying that Hulu's reported 2.7 million subs are about to run out the door, but some will. More to the point, in an era where value matters and people are looking to take advantage of any deal they can, Hulu has just removed its major live TV selling point.

It is still a good package and worth the money, but its now far more comparable to those other services. It's no longer the best option, but an option.

There's no longer a savings reason to choose Hulu.

What's more, this now places Sling TV in a great position to pick up even more subscribers that are focused on value. Whether they be those new to streaming, those exiting PlayStation Vue subscribers, or those now suddenly looking for a cheaper alternative to Hulu + Live TV.

For example, $38 now nets you a Sling TV Orange or Blue sub along with Disney+, ESPN+ and basic Hulu.

You could even go for the Sling Orange & Blue package and get Disney+, ESPN+ and basic Hulu for less than what Hulu + Live TV now costs.

That is, what Hulu + Live TV now costs without Disney+ and ESPN+.

The post Did Hulu Just Price Itself Out Of The Live TV Race? appeared first on Android Headlines.

from: https://www.androidheadlines.com/2019/11/did-hulu-just-price-itself-out-of-the-live-tv-race.html