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Disney’s OTT Chief Kevin Mayer: Hulu’s $10 Price Increase Was Necessary to Make a Profit

Jason Gurwin

Last week, Hulu announced that Hulu Live TV will increase to $54.99, beginning December 18. The service which was previously $44.99 per month just reportedly added 400K subscribers in the third quarter to reach 2.7 million subscribers according to MoffettNathanson’s Q3 Cord-Cutting Report.

At the Recode Media Conference, Disney’s Direct-to-Consumer Chairman Kevin Mayer was asked about Hulu’s recent $10 price hike of Hulu Live TV, since Disney is now the official parent of the company. “The programming we have on a live TV bundle is quite expensive. For us to reasonably make a profit on it, we have to raise the price. We’re not the only ones who’ve done it.”

This is just the latest in industry-wide price increases by Live TV Streaming Services, as they try to cover the costs of fattening bundles. With services adding channels from Turner, Viacom, and Discovery — most services including fuboTV ($55) and YouTube TV ($50) raised prices as much as 25% in the last year. AT&T TV NOW has gone the other direction, raising prices by almost 50% this year and thinning the bundle — removing channels from A&E, AMC, and Discovery. Only Sling TV ($25) have yet to raise prices in 2019, while Philo discontinued their cheaper $16 a month plan. And PlayStation Vue, despite raising prices in July, decided to shutdown their service.

One of the draws to vMVPDs is to get live sports content on channels like ESPN, which Mayer says could eventually make its way to a standalone offering. “At some point, we could make an à la carte option available over the top for ESPN.” While the company already has ESPN+, which offers sports content, it doesn’t offer sports like Monday Night Football which is only available on linear ESPN.

However, that could be expensive. NBA TV just recently launched an à la carte option of their channel for $7 a month — which more than 20x the cost its sold to distributors as part of a cable bundle.