If you have Hulu, you’re going to have to pay for it.
The streaming television service that Time Warner on August 3 announced it has taken a 10% stake in is shuttering its ad-supported free platform, launched in 2007.
According to The Hollywood Reporter, Hulu will start to notify its users of the free service’s demise within the next few days. These non-paying consumers will be offered free trials of Hulu’s paid subscription services.
Hulu is jointly owned by the Walt Disney Co., 21st Century Fox, NBCUniversal and, now, Time Warner, which paid $583 million cash for its share of the ownership pie. With Time Warner’s investment, Hulu is now valued at $5.8 billion, according to Time Warner.
Time Warner’s entry as a stakeholder is concurrent with changes at Hulu that have seen the launch of an advertising-free option in the last 12 months and the release of original content—positioning Hulu as a closer competitor to Netflix and Amazon Prime, rather than a platform for the OTT delivery of network programming.
Various news organizations estimate Hulu’s subscriber count at roughly 12 million. By comparison, Netflix has 46 million paid subscribers.
In prepared remarks, Hulu SVP and head of experience Ben Smith said, “For the past couple years, we’ve been focused on building a subscription service that provides the deepest, most personalized content experience possible to our viewers. As we have continued to enhance that offering with new originals, exclusive acquisitions, and movies, the free service became very limited and no longer aligned with the Hulu experience or content strategy.”
Free content on Hulu had been limited to the five most recent episode of a television program currently airing on a partner broadcast or cable network, such as America’s Got Talent, South Park and Brooklyn Nine-Nine, the Hollywood Reporter notes.
Now, the focus is on premium content that includes streaming exclusives, available for a monthly fee. Users of Hulu’s no-cost service will still be able to view this contact on such distribution partners as Comcast and forthcoming online streamer Yahoo View.
Time Warner’s investment in Hulu, coupled with the phasing out of a no-cost platform, are crucial steps designed to stem “rapidly mounting losses” approaching a half-billion dollars per year, BTIG Research analyst Richard Greenfield told the New York Times.