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Here’s how Hulu is finally becoming a competitive streaming service

Hulu allows subscribers to watch television shows over the Web.Hulu allows subscribers to watch television shows over the Web.
Hulu allows subscribers to watch television shows over the Web.

It seems crazy, but a little over a month ago Hulu still included ads, even its premium subscription option. With Amazon and Netflix offering ad-free streaming along with arguably better content selections, it was becoming harder and harder to make a case for Hulu over the last several months.

Lucky for consumers—and less lucky for its competitors—though, the site has been playing some major catchup, propelling itself from an also-ran to a viable option in the streaming market with a variety of improvements.

At $11.99 per month, an ad-free Hulu subscription is more expensive than the most popular Netflix option, which just increased from $8.99 to $9.99. It isn’t cheap compared to Amazon Prime (available to those who shell out $99 a year for expedited shipping), either.

But according to Erik M. Keith, principal analyst of broadband networks and multi-play services at Current Analysis, this shouldn’t be a huge deterrent for current and potential subscribers. “Lower pricing can drive customer acquisition, but given that the cost of content continues to climb, a low-price model is not sustainable over the long term.” And with nine million Hulu subscribers already on board, the company could be in a good position to see that number rise, especially if it continues to deliver on the content front.

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And indeed, Hulu is hustling to improve is content selection. While the service has always been a solid choice for current TV shows, its library of older shows and movies has long paled in comparison to that of Netflix. Hulu’s clearly working to remedy this problem, drumming up buzz when it landed streaming rights to Seinfeld back in April and continuing to flesh out its selection with original series and exclusives.

Hulu is also taking the long view by integrating new technology into its strategy. The company just announced plans to release a virtual-reality app for the Samsung Gear VR in November. Subscribers who purchase the $99 device will be able to watch content through a virtual living-room setup.

While such applications are unlikely to lead consumers to pick Hulu over another streaming platform, the service’s exploration of the latest tech bodes well for its future—especially as other digital content providers such as Netflix and YouTube have already jumped on the virtual-reality bandwagon.

While it remains to be seen how the company’s ventures into new tech will pan out, one thing seems clear: Hulu’s content is more closely aligned with consumers’ preferences than ever before.

“The ad-free option is likely to be an easy up-sell for Hulu’s existing customer base, and will also likely drive new customer interest, especially if Hulu can demonstrate a broader, or more appealing range of content than its OTT streaming rivals,” says Keith. “Beyond the success of original programming, having the most appealing content libraries—driven primarily by the most popular, and current content—will be critical.”

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Correction: An earlier version of this story stated that Hulu had six million subscribers, not nine million.