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Hulu CEO Rethinks the Concept of Ads on Paid Subscriptions




hulu plus

What do Netflix and Amazon Prime have in common? Besides being two of the most popular movie and TV streaming services, they don’t put ads on their shows.

Hulu looks a lot like Netflix. They have loads of new and classic TV shows and movies that you can stream right now, on your computer, your tablet or phone. But with Hulu, you get commercials. Lots and lots and lots of commercials. Three 30-second spots per half hour – which doesn’t sound so bad when you read it but it’s bad when you’ve watched the same ad three times in forty minutes.

But hey, it’s free so they have to pay for the shows somehow, right?

Not really, because Hulu Plus, the paid subscription side of the service, has ads, too. Maybe, just maybe, that’s why the service isn’t doing so well. I know it’s the reason I canceled my subscription.

After two failed attempts to sell the business, Hulu’s CEO Andy Forssell is rethinking the plan. He told investors that he intends to scale back the number of ads in the video streams. He’s also considering a higher level account that eliminates ads altogether. It works for Netflix, but Hulu doesn’t have a large customer base – so subscriptions alone won’t pay the bills. Not right now but that’s okay because Disney, 21st Century Fox and NBCUniversal, co-owners of the site, recently invested $750 million in the biz.

Said Forssell,

“What the $750 million lets us do is press down the accelerator and grow (the subscription business) faster, both through content and marketing. We want to get it to scale.”

Hulu has a younger, richer audience than broadcast TV. You can see who their demo is just by hitting the front page of the site. New shows from Fox, Saturday Night Live, Family Guy. They run a large number of shows from around the world and they have a whole channel devoted to video game news and trailers. Hulu should work. It’s a whole different vibe from Netflix and Amazon Instant. It’s more like YouTube with production value – and it’s backed by three of the biggest entertainment powerhouses.

Hulu should be making money and tons of it – maybe, instead of getting brands to buy ads, they should get them to sponsor content. That’s how you satisfy both the accountants and the consumers.

  • aLrEadY DeaD

    I think re-structering their ad strategy would be a great idea. They have potential but like said above the ads are super annoying, especially when they only have at max like 5 different ones so you see the same ad over and over and over again. Other than that, it is a great service and has a lot of good content.

    • Fox

      This is my only real complaint. Too many repeat ads within the same program.

  • John

    They also need to straighten everything out to where ALL shows that are available on the Hulu Plus website are also available on other outlets like Roku. Too often, I run into the stupid “Web Only” message while trying to watch shows on Roku. I pay for this content, so I should be able to watch it wherever I want.

    • Joey Lopez

      oh jeez dont’ even get me started, that’s the dumbest thing EVER, those shows shouldn’t even show up in searches on devices if they aren’t available on them, but the worst is on XBOX360, hulu is terrible all around on the 360.

    • Fox

      As the owner of a Samsung SmartTV, I, too, am annoyed that PCs have access to so much more content than other devices. So I use a 2007 model PC attached to the big screen with a bluetooth keyboard/mouse instead of the SmartTV functions, so the licensing issues with alternate devices do not affect me. This renders my SmartTV dumb again, but honestly, the PC is smarter than the TV could ever have been, and I can surf the web, work, read facebook, etc. while watching. And if I miss something because I am reading or writing, I can rewind with a click. In fact, I am watching TV as I type this. It’s made my former computer desk a sad, dusty place.

      • nigra truo

        Well, you know: no TV hardware manufacturer knows a damn about how to do a media center, they never have and never will. Buy a Roku and save your money on the TV, just buy a TV with a nice screen, the software will suck anyway, better spend it on something where they actually know what they are doing.

        Don’t get me wrong, I love Samsung, I got a smartphone from them and it is excellent quality, really great hardware. I just wish they would stop trying to do software, they suck so baaaaad at it, the best thing on a android phone that you can do is remove every bit that carries the name Samsung, the phone will work so much better. The lesson here is: if you suck consistently at something, don’t do it!

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  • rudyy

    Scaling back the number of ads – and it’s far more than what this article says – isn’t the same as eliminating them. If Hulu+ charges more than Netflix and still has ads, that’s for losers.
    Further, charging more than Netflix, without ads, is a loser.
    This is why, just three days ago, i refused to subscribe. In not going to pay for content and sit through ads, not one.

    • Anti Dumb Apes

      How is charging a dollar more than Netflix while eliminating ads a losing proposition?

      • Christopher Suiters

        Because why would I want to pay for Hulu and watch ads when I can pay for Netflix and not. And though Hulu may have newer content. A lot of people will only pay for 1 streaming service. You asked a question with a really obvious answer.

        • Anti Dumb Apes

          I don’t know if you just didn’t understand what I wrote or failed to read it altogether. I kind of hope you just didn’t read it, b/c I was pretty clear. Try to read it in the context of the OP and see if that helps.

          • s4ndm4n2006

            I’m not sure if you are able to read yourself or not but your original reply to this was further off base than the reply to you. You said “how is charging a dollar more than netfllix while eliminating ads a losing proposition?” while the original comment nor the original article talks about eliminating ads at all, only scaling them back. The original comment was saying it’s a losing proposition if they charge more and STILL HAS ADS.

            The reply you acted as if the replier was not reading your reply is spot on because he’s saying that it addresses the actual article and comment in that it talks about paying more but without eliminating ads, only scaling them back.

            So yes it is a losing proposition for hulu to try to charge more than netflix on a service that would still have ads.

  • JoeBoo

    Just canceled my sub to hulu because the commercials were a major time suck! Hopefully hulu drops the commercial nonsense!

    • nigra truo

      You know what I don’t understand? Doesn’t Hulu and these cable guys behind it READ THESE COMMENTS? No? They pay millions for these rating agencies, Nielsen, Comscore? To create what? To find out what their customers are thinking of them? And HERE IN THIS FORUM you can read an example of what customers really want, how easy is that? Totally sad, I don’t think they will surive. There is a constant stream of customers that quit Hulu and go give their money to Netflix.

  • sayakipli

    Not really, because Hulu Plus,planetjudi.com the paid subscription side of the
    service, has ads, too. Maybe, just maybe, that’s why the service isn’t
    doing so well. I know it’s the reason I canceled my subscription.

  • Nick DiLello

    I will be dropping my subscription too…they must be brain dead to think they can charge and force us to watch commercials! The streaming hitches when the commercials start too…it needs improving or it will die a miserable death… :(..

  • peakofelephants

    Maybe Hulu doesn’t have a “large customer base” because people are instinctively offended by the notion that they are paying for advertisements as part of their “premium” service?..

  • tsh85

    Not sure which Hulu you’re watching “Three 30-second spots per half hour?” I just watched a 22 minute episode of South Park, and there was a 150 second (2.5 minute) commercial spot before the show even started, and another 300 seconds (5 minutes) of commercials during the show, for a grand total of 29.5 minutes. Seems like there is exactly the same amount of commercials on Hulu that there is on cable television. The numbers don’t lie.

    • tsh85

      I give Hulu one more year before it is about as popular as MySpace.

      • Drakman

        Yeah I’ll say that’s about right. I thought maybe I was imagining it, but lately it’s seemed like there were more ad breaks and longer ones, and I’m pretty much tired of it. There are just better options out there.

    • Joey Lopez

      Thank you, EXACTLY. I’m watching Parks and Recreation a 21 minute show, and there has been a total of 32 minutes playing (11 minutes of ads). And yes I pay for Hulu Plus

    • Fox

      Neither matches my (sadly) heavy-using two years of experience with the service. 90 seconds is by far the most common commercial break length. 30 seconds spots and 150 second spots are exceedingly rare. Since I replaced my expensive cable with Hulu Plus, I’ll be okay as long as they don’t surpass the number of ads on actual TV.

    • landon

      I have gotten used to refreshing my browser right before the commercial. There is either no commercial at all after doing this or there is only one.

    • Anti Dumb Apes

      Yup, and you have to deal with those Cricket ads, sometimes as many as 5-6 per episode and it’s the same ad being played. I cancelled my subscription due specifically to that, and the fact that you have to watch a commercial before a show starts, watch the musical intro to the show, AND another commercial right after that.

  • Joey Lopez

    *sigh* I’m about this close to ending my subscription right now, I’m watching Parks and Recreation with the same 3 ads and they run WAY more often than 3 per half hour, the shows are only 21 minutes long, and there are FOUR white dots on the scrubbing bar, which means THREE ads sometimes ranging up to 90 seconds EACH. that’s potentially EIGHTEEN FUCKING M INUTES of ads for a TWENTY ONE MINUTE SHOW!. And I PAY FOR HULU PLUS! omg I’ve never done the math before, THIS IS HORRIBLE! the ONLY advantage is seeing the show a week after it’s aired, as opposed to after the season like on Netflix and Prime… okay, I’m really upset now.

  • Fox

    I am a TV *fanatic* and I’ve had Hulu Plus for about two years. Typically the commercials are between 60 and 90 seconds and I finish a “half-hour” show in 25-28 minutes. I use a PC attached to the big screen and a bluetooth keyboard/mouse, so the licensing issues with devices such as XBox do not affect me. I revel in the fact that becoming a cord-cutter has saved me over $2000 (my cable bill was over $100) and the interface beats the snot out of that crummy Time-Warner DVR. Come to think of it, just the DVR rental part of my cable bill was higher than the cost of Hulu Plus.

    I assume all the people claiming they would never pay for content with ads own their own DVRs and only watch OTA broadcasts?

    • morganfj

      try http://www.tvonline.cc they are cheaper and play with and without Flash… so even play on Android.

    • nigra truo

      I am a cable cutter and not because Netflix or anything. Well, Netflix is the answer to my question. The problem is simple: Cable is TO DAMN EXPENSIVE. It is by no means, absolutely not worth more than 60 bucks a month. There is too much crap and low quality on, too many commercials and too much garbage. Times have changed. We also don’t spend 10,000 dollars on a computer, they don’t cost that much anymore, everybody knows that.
      And even though they USED to cost that much, all the companies that insisted that their customers pay the old price went belly up and died. And so will company that will not lower their prices and PLEASE READ CAREFULLY GUYS, get that TV ads are over and a thing of the past.

      So, Netflix should be a really really good investment. Their stock went up almost 1000% already in the last years and wait till they expand into the rest of the world. And of course, no cable company could go to another country, they only think local and would have to content with other cable companies that have their local markets in a similar iron grip.
      And, are equally unprepared to the likes of Netflix that focus on streaming.

  • morganfj

    I will be cancelling my subscription.. the comercials are madning. If I wanted them I would just put back my Antenna….. Of course the new site http://www.tvonline.cc is well worth the money if you watch TV only.. you pay by what you watch which comes to about $0.40 a show … they also give you free access to try. And unlike ALL streamers, they have just about everything…. Hulu, want me back, get rid of the Ads.!

    • morganfj

      By the way they have BOTH Flash and non-Flash so ANY device with Web-Browser works… I have used it on Smart devices (with web-browser-a REAL SMART streamer), computer, Android..
      When at a friend with no Streamer I simply HDMI my tablet to the TV…. I have been with them for over a month and still have not had too pay… but it will be worth it to watch what I WANT!

  • ROBIN HOOD

    might as well be watching tv if you have commercials. your already paying for tv anyways. I will stick with netflix

  • MJ

    I can see the ads for newer (< 6 months) movies and TV programs, but why advertising on older programming?

    I do like the "time clock" that shows the commercial duration – allows me to mute/unmute during the ads. I also like the fact that if you rewind over a commercial, they are skipped the 2nd time.

  • I Hate Hulu

    If Hulu wants me to watch their ads, they should pay ME, not the other way around. They won’t even let you fast forward or skip over them because they know everyone will. I can’t wait for them to disappear.

  • nigra truo

    Alright, I am absolutely not paying money to watch commercials! Pay TV is free of ads. I’m a very happy Netflix customer now and I’m always annoyed and feel sooooooo dumb when I watch TV on cable when I am at somebody elses house, ads just suck in such a bad way, it is not even funny.
    Now paying and having watch ads, that must make you feel so incredibly stupid, nope, I will never go there. No mater if they have the newer content.
    So my money is on Netflix, they do what I want and respect me as a paying customer. But I doubt if Hulu can win this race: it is backed by the old and the old needs and wants ads, that is how they make their money, they create worthless and cheap content (paid by advertising bucks), ads have to stay for them and they can’t produce anything high quality or expensive, because they know, their ad bucks won’t be able to pay for it.
    And if you guessed it, yes, I am a cable cutter, among a massively growing audience that is fed up terminally with cable TV and their incredible overinflated prices. One day, Netflix will have all the shows and films you can imagine in their portfolio. Many cable companies will have gone bankrupt, when a-la-carte programming finally arrived and they could not cope. Netflix will cost 40 bucks a month, but carry no commercials. And the content providers have realized, that they won’t get 180 bucks like now anymore, but just 30, because times have changed. As they say: the let the market play and be something be worth what the market says it is worth.

  • nigra truo

    We are at an interesting phase here, it is the same for each industry: Big fat company, has been around for decades, is so big and important that it figures that it does not have to listen to what their customers really want. Smug, self satisfied, never been better. Smaller company is growing rapidly by eating up customer base of big giant by giving their customers what they really want, LISTENING to them, for less money. Big giant gets into financial trouble, does not get it, does not see the light and then folds up.
    Dear cable giants, take example at what Netflix did with Blockbuster and be very worried. Blockbuster used to laugh and ridicule them. Hey, what a cute little company, they can’t touch us!
    The rest is as they say history ;-)

  • ks123445

    3 thirty second slots every half hour? AS IF! It’s literally 4 thirty second ads averaging every 10 minutes (sometimes the show is on for 5 minutes… and then another 4 ads!) Really getting on my nerves. It never used to be this bad, and this is WITH Hulu+. What a joke.

  • Dkay

    Ok so I am becoming disenchanted with the ads on Hulu Plus. Why should I pay for ads? I can DVR the program and have the same viewing experience. This is dumb. When I first started there were only a few simple ads and they weren’t in every program. I can watch a current season on Amazon ad free. Blah. Im done with them.

  • Doyle

    I signed up for the one week trial last night to pickup some back episodes of 2013 Scandal. I have to say I will be cancelling the service just as soon as I get through a couple more episodes this week. Repeating the same commercial over and over is more than I can take. In the future, I would just wait for the current season to end and pick them up on Netflix with no commercials.

  • D.j. Richards

    I was in the mood for some Chicago Hope the other day. It was never released on DVD…but seasons 1-3 are on Hulu.

    Picked an episode. Two ads. “Previously on Chicago Hope…” Then two ads. Opening teaser. two ads. Opening credits, two ads. SIX ADS in less than 2 minutes! Altogether, 26 ads in one episode.

    Garbage.

  • 2cent

    I have been enjoying HULU PLUS for about a year. I could tolerate the short ads. But they are increasing in length and frequency. Now I see 4 ads at a time, they seem to be spaced more closely, and they repeat the same few ads over and over throughout the show. I’m thinking of dumping the service and using a combo of On Demand and online instead.

  • memememe

    I am new to Hulu+ and I agree to some extent with the commercials for the new episodes of cable shows, however, it’s ridiculous that I’m sitting through commercials for a tv show that’s over 10 years old…that’s just greed. I’m watching commercials during a cooking show that didn’t even run with commercials on basic cable to begin with, seriously? I’m paying for the service, I pay the same amount of money for Netflix and can watch the same 10year old tv shows with no commercials. I’m ready to bail. Oh and if I have to listen to Justin Timberlake encouraging some chic to sing one more time, I may completely lose it.

  • Derimahuluplusmember

    Lol at the fuckin idiots paying for Hulu Plus. You guys are saps.

  • Mk

    Straight up chunk

  • jared

    Scaled back is a joke. Tonight I watched 3 commercials in one block with one lasting 90 seconds. There were 3 blocks of commercials so 9 in total… For a 30 min program. Hulu is obnoxious. I am completely over hulu. They used to be free if anyone remembers. Now they not only make money off you, but these other companies as well. We should all cancel our accounts and get dvr. Maybe then they would realize how stupid they have been.

  • louie

    I am offended by all the commercials on Hulu given that I am paying for it! The intent of TV commercials is to pay for the content. If you pay for a subscription you shouldn’t have to watch ads! It should be one or the other! They are getting paid from both the customers and the advertisers. I almost feel stupid and “taken” for paying to watch 12 commercials during a 45 minute show!! It sort of feels like paying the thief to rob you… And I HATE commercials! I am canceling my subscription…

  • tm

    You guys complain about ads and how netflix doesn’t have tv ads on their tv shows. Hulu lets you watch just about every tv show the day after it comes out. Netflix doesn’t do that. I would like the ads not to be as long but I’m not complaining its still way cheaper than paying for cable.

  • Mike Bowman

    I signed up to Hulu + hoping for no ads and their is still ads. I might as well just be watching TV. I pay to have no ads. Isn’t that the point of paying? I think I’ll be cancelling before my 7 day trial is up. I’m not happy about it at all

    • Sakhal Nakhash

      I did the same thing a few months ago except I didn’t sign up for the free trial thinking the paid version was ad free, and I had to sign up for Hulu Plus because Microsoft forces you to have Hulu Plus on the Xbox 360. I was outraged when I saw they expected me to pay to watch ads. I cancelled my subscription. I will not and shall not pay to watch advertising.
      Hulu is trying to have it’s cake, and eat it too.

  • Hannah

    Yup, my friends and I no longer use Hulu. This is one of many reasons why they lost us as customers. They did really bad changing things up like that. No more consistency, shows are not added in time, and now LONG ads. Screw that!

  • sfosri123

    I have Hulu Plus and I had not been watching Hulu in a while. I tuned in to watch The Daily Show and I was shocked to see that there were so many blocks of 3 commercials in a 21 minute episode. It made it unwatchable. Most of the commercials are also loud and obnoxious. In the past at least they used to be for some non profit or some thing else…now they are also localizing some of the commercials.

    I will be cancelling my subscription, it’s just not worth it to put up with these annoying commercials when you are paying for the subscription, at least on Cable you can fast forward on your DVR.

  • Tara Garmon

    A lot of people talk about how cable TV has ads, and you pay for that. True, but I can record shows on my DVR and fast forward the commercials. And I do. I don’t watch any of the commercials. I hate paying for Hulu Plus and being forced to watch the commercials because it won’t allow me to fast forward. If I am that adamant about not watching commercials, I’m obviously not going to be of benefit to the advertiser, because the commercials are going to ensure I DON’T but their stuff because I HATE being forced to do stuff!

  • drkennethnoisewater

    Torrents don’t have ads. $7.99/mo ad-free before I’d even consider h+.

  • Graig

    If they cancelled the commercials I would consider subscribing.

  • Kevin

    I’ve been a plus subscriber for a few years. Last year the most ads you would have in a row would be 2-3. Last night it was 6! I’m dropping this stupid service. I would pay twice what I’m paying to watch add free.

  • s4ndm4n2006

    I started the trial on PS4 for the sole purpose of watching without ads. My assumption was that if I joined and subbed to them there would be no need to watch commercials. At the time I started it 1 whole night ago, I guess I had not known about this situation with Hulu. Imagine my surprise when I started to watch my show and found myself enduring ads anyway.

    Even for shows that are really wanted, that I really love, it’s not worth it because if I want to watch tv with ads I can turn on cable anytime and part of the pull for using netflix (which I love) and amazon running a close second is for the ad free shows.

    It’s common practice for any service regardless of what it is, to offer something to make up for the loss in revenue with ads to offer free service but Hulu is completely on its own being an internet based service that offers a pay-for service AND forces you to watch ads. In fact even on tv with dvrs as common place, you can at least pause ads and then ff through them after a short time making it possible to skip them but Hulu you’re forced to wait for the ad to finish playing.

    Complete failure on Hulu’s part in offering something worth the price they expect you to pay. I cancelled even as it bothered me that I would have to give up the show I wanted to watch. Shoot I’ll buy the blu ray complete season before using hulu. At least then I can watch the entire season without ads, and that, repeatedly if I want.

  • Baho Puwetmoh

    I can’t imagine anyone being foolish enough to pay MORE money for a service with LESS content and MORE ads.

  • Fuckyou

    Hulu acts as if the internet is TV, not realizing cable and tv has been failing for a while now, I and many people have stopped watching tv all together, yet these cable companies think they can just put their business online. they are doing the same tactic that pushed people away from tv.
    The stupidity is amazing.

    Hulu claims it charges less for using ads yet i call bullshit. this only gives them a revenue stream that does not undercut their paid subscription.

  • Matthew snyder

    As much as I don’t like the commercials, the thing that really gets me is watching the same commercial over and over and over and over and over again. It actually makes me have a deep hatred for whatever they are selling so it’s actually counter productive to the advertisers as well.

  • Psst

    How do I get the Hulu commercials reduced to the 3-30 second spots described here? I’m getting more than twice that number, and up to 2 minutes at a time, plus there service frequently crashes after a commercial, making me watch it a second time. I’d be happy to get the sme exact commercial breaks that the shows originally had but this is ridiculous for a paid subscrition, whose ‘original content’ is so bad I never watch it any more.