Hate Ads? Hulu Will Let You Watch TV Ad-Free for An Extra $4 A Month

Putting a price on peace of mind. JL

Peter Kafka reports in re/code:

Hulu will charge $12 a month for its ad-free version, while continuing to market its ad supported service (for $8 a month). The 50 percent price jump between the two is meant to give most of Hulu’s nine million subscribers reason to keep the version they have, not hasten erosion of the ad model.
Netflix, Amazon and Hulu will all let you stream old TV shows and movies. The difference is that Netflix and Amazon don’t have ads and that Hulu does — even for its $8 a month subscription service.
Now Hulu is offering an ad-free option as well, if you’re willing to pay extra.
Hulu will charge $12 a month for its ad-free version, while continuing to market its ad-supported service. Netflix charges new subscribers $9 a month for its service; Amazon streams video for free for people who subscribe to its $99-a-year Prime shipping service.
The Wall Street Journal had previously reported on Hulu’s plans.
Hulu is jointly owned by Disney, 21st Century Fox and Comcast’s NBCUniversal*, and those companies are heavily invested in the business of selling TV ads. Hulu won’t come out and say this out loud, but the 50 percent price jump between the two versions is meant to give most of Hulu’s nine million subscribers a reason to keep the version they have, and not hasten the erosion of the ad model.
Hulu CEO Mike Hopkins will say that he expects a “solid majority” of Hulu’s subscribers will end up with the lower-priced version.
Hopkins says getting the various rights owners for the Hulu catalog — which includes TV shows from NBC, ABC and Fox as well as stuff from other networks, plus movies (note the Epix deal it just signed), plus stuff Hulu is creating on its own — to agree to the ad-free option took months.
As a sign of how difficult it is to line this stuff up, Hulu’s ad-free version comes with one small asterisk. Seven Hulu shows — “New Girl,” “Scandal,” “How to Get Away With Murder,” “Grey’s Anatomy,” “Once Upon a Time,” “Agents of Shield” and “Grimm” — will be what Hulu is referring to internally as “exception shows,” which means they will run with ads even on the ad-free version.
But this is a pretty minor concession: While the shows will have a 15-second commercial before they start and a 30-second ad after they end, there won’t be any commercials in the middle of the programs.