James Murdoch says ~50% of Hulu's 20M subscribers opt for the $11.99/month ad-free plan, instead of the $7.99/month plan with commercials
But does he think Facebook could one day offer an ads-free version? Maybe not. — Hulu has three principal owners at the moment, including 21st Century Fox …
Context & Ripple Effects
Hulu first tested this split back in 2015, when reports surfaced of an ad-free option priced around $12-$14, before the service launched its commercial-free tier at $12 a month that September. Three years on, James Murdoch — whose 21st Century Fox is one of Hulu's three principal owners — puts a number on how the experiment landed: roughly half of Hulu's 20 million subscribers pay the $11.99 ad-free rate rather than $7.99 with commercials.
First-order effects
- About 10 million of Hulu's 20 million subscribers are paying a $4-per-month premium for ad-free viewing, giving Hulu a large guaranteed-subscription revenue base while removing those viewers from advertiser reach.
Second-order effects
- The ad-supported base is where the money concentrates: reporting a year later pegs Hulu's ad-tier economics at more than $15 per subscriber per month once ads are counted, which pressures Hulu and its owners to steer new signups toward the cheaper commercial plan rather than the premium one.
Third-order effects
- By 2019 the mix had inverted — Hulu reported 70% of its 82 million viewers on the $5.99 ad-supported plan, generating $1.5 billion in annual ad revenue — pointing toward ad tiers becoming the default product and ad-free a niche upsell across streaming, a structure reinforced as Disney moves toward folding Hulu content into Disney+.
The trend: Streaming services are flipping from ad-free subscriptions as the premium default to ad-supported tiers as the volume-and-profit engine, with ad-free repositioned as an upsell.