Hulu Runs $5.99 Promotion as Netflix Hikes Prices

Hulu is looking to corner the streaming market during Netflix's price hike, dropping its basic plan to just $5.99 per month.

Hulu has a lot to offer that Netflix does not, from its award-winning originals to a different selection of licensed TV shows, many now see the streaming service as a big competitor. Add to that the gap in prices, which Hulu is now trying to widen.

On Tuesday, Hulu's basic plan dropped in price by two dollars. The change was announced last month shortly after Netflix's prices rose. According to a report by Ad Week, Hulu's data shows that lowering the price on its basic plan can accelerate subscriber growth dramatically.

Of course, Hulu's basic plan is not for everyone. For one thing, it plays commercials during most programs — something that the general streaming audience has become very averse to. To get rid of the ads, subscribers have to upgrade to Hulu's base plan with no ads, which is still the same price at $11.99 per month.

Meanwhile, Hulu has actually raised the price on its higher-tier packages. Hulu with Live TV now costs $44.99 per month instead of $39.99, while Hulu with Live TV and No Ads is now $50.99 per month instead of $43.99. The service also offers add-on packages such as HBO, Showtime and Starz for varying prices.

Still, considering that Hulu's live TV offerings can essentially replace a cable package, the prices are still reasonable compared to other options. It appears the streaming service is willing to gamble that customers at the higher tier will accept a small increase to get more people in the door on the basic plan.

Meanwhile, Netflix appears to be doing alright in spite of its price hike last month. The streaming service raised its prices at all levels, taking basic plan from $7.99 to $8.99, its standard plan to $12.99 and its premium plan to $15.99.

Still, for most people Netflix is synonymous with binge-watching and at-home entertainment. The company has shifted hard towards original content in recent years, making it a powerful institution in the entertainment industry.

Meanwhile, licensed material is under constant threat. Back in the fall, fans went crazy when Netflix announced it would remove Friends, prompting the company to renew its license on the show instead. In terms of non-serialized sitcoms, those fans may find more of what they are looking for over on Hulu.

Hulu offers a one-week free trial for any level of service before making customers commit. The new pricing went into effect on Tuesday.