After Netflix price hikes, Hulu will lower the price of its base, ad-supported subscription plan to $5.99/mo, down from the current $7.99/mo, starting Feb. 26
The core service is getting cheaper, but live TV now costs more — Hulu just announced that it will lower the price of its base …
Context & Ripple Effects
Hulu is running a scissors strategy against Netflix: weeks after Netflix's price increases, it cuts its ad-supported base plan to $5.99 while pushing Hulu + Live TV up to $45 — a service that launched at $40 a month in 2017 (launched its live TV service for $40). The cheap tier is a customer-acquisition weapon; the live tier is where margin gets recovered.
The move only makes sense because of what Netflix just did — with the market leader raising prices, Hulu can position itself as the budget option without looking desperate. The related coverage shows how quickly the discount era ended: by November, Hulu raised Live TV another 22% to $54.99 (raised its Live TV price by 22%), and by 2021 even the ad-supported plan was climbing again (raised both on-demand plans by $1).
First-order effects
- From Feb. 26, new and existing Hulu subscribers on the ad-supported base plan pay $5.99 instead of $7.99, while Live TV subscribers see their bill rise to $45.
Second-order effects
- Netflix's price hikes hand Hulu a pricing umbrella: Hulu can now be the cheapest major on-demand service precisely when Netflix subscribers are re-shopping their bills, pressuring rivals to either match the ad-supported floor or defend premium pricing with exclusives.
Third-order effects
- If the pattern holds, streaming splits into a cheap ad-funded entry tier and an expensive live/premium tier — ads become the subsidy that lets services undercut each other on headline price, which is exactly the path Hulu's own later price reversals suggest was always the plan.
The trend: Streaming pricing is bifurcating into loss-leader ad-supported tiers and premium live bundles, with each Netflix increase widening the gap competitors exploit.