Hollis Johnson/Business Insider
- Hulu CEO Randy Freer wants to make it even easier for Hulu customers to jump back and forth between Hulu product offerings.
- Customers will be able to sign up for Hulu with Live TV for a few hours at a time when there’s a live program like a sporting event or award show they want to watch.
- Freer sees such a hybrid model — part subscription VOD, part ad-supported VOD, part vMVPD — as the best way to set Hulu apart from competitors.
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Hulu wants to make it easier to sign up and then drop its services.
Forget about customers switching between program offerings on a quarterly or monthly basis, Hulu CEO Randy Freer told Business Insider. He sees Hulu’s future as offering customers the ability to sign up for programming for just a few hours at a time.
Seasonal churn is common in streaming TV. Unlike traditional pay-TV, streaming services market themselves on the ability for customers to quickly sign up or cut service without penalty. That often means that once a sports season or a popular program has ended, customers unsubscribe until there’s programming they want to pay for again.
That creates subscriber volatility. But Hulu sees this hybrid model — part subscription VOD, part ad-supported VOD, part vMVPD — as a great differentiator that lets it better serve its subscribers.
Freer said he wants to give people even more ability to move between services, although no specific plans are in the works.
"If you’ve got people coming over to watch the Oscars and you’re a Hulu $5.99 subscriber, how do we make it so easy for you to upgrade to live for that window of time, for three or four hours?" Freer said.
The challenge is to get billing and payment down to a one-click process and get customers comfortable with their bill varying even more over time as they shift among services.
To Freer, offering short-term availability of programming also creates new advertising opportunities. A brand could sponsor the Oscars live on Hulu, for example, permitting any Hulu subscriber to watch it live for free without having to subscribe to Hulu with Live TV.
Contract negotiations with media owners
Of course, subscriber volatility isn’t ideal. Freer acknowledged that he’d "love a little more predictability" in the number of Hulu Live subscribers. But Hulu is getting better at forecasting subscriber numbers, and it plans to use that information to recommend Hulu tiers to customers.
"If we know that somebody is paying $44.95 for live, but 70% of their viewing is on-demand, we should be able to tell them, ‘There’s a better package for you,’" Freer said.
Hulu also would like to offer more choices like a skinnier, $20-$25 per month tier, but doing so will depend on how future negotiations with content owners goes.
Freer doesn’t foresee being able to offer channels a la carte, saying that would be a bad deal for customers. But some ability to slice up programming is important.
"Media companies and others will have to be open to breaking apart some of their content offerings," Freer said "You don’t need a bundle of five different cable networks while 90% of the viewing is against one of those cable networks."
Contract renewals are set to place in late 2020 or early 2021, Freer said.
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