Hulu CEO says ad-free SVOD option off to a good start

Ads, or, no ads? SVOD service Hulu is discovering there’s a demand – albeit so far, a demand of uncertain size — for the ad-free model it introduced earlier this month, despite the higher price tag it carries.

Speaking at an IAB session Tuesday, Hulu CEO Mike Hopkins said the new, $12 ad-free Hulu tier is likely to appeal to a “big chunk” of users that Hulu data shows have avoided the service previously because of ads. Hulu also is hoping that customers who have previously cited ads as the reason they cancelled their subscription will reconsider and return to the fold.

“So far, so good,” Hopkins said of the new service.

But, Hopkins acknowledged the new model isn’t prompting huge sign ups… yet.

Hulu’s $8 model, which promises users limited commercials, also has been evolving as its turned to programmatic ad tech to try and make the commercials more targeted.

Consumers, he contends, “like advertising if it’s the right advertising at the right time.”

Possibly.

Will other services, like Amazon Prime Instant Video and Netflix, mess with their established models?

Also possible.

Amazon already runs pre-rolls to promote other content and, although Netflix CEO Reed Hastings has consistently pooh-poohed the idea of an ad-supported model, it’s still a notion that pops up now and again.

The only certainty? The model for monetization of online video will continue to evolve as technology and user habits evolve.

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn