Hulu to Allow Ad-Supported Downloads

Last week’s post, “Advertising isn’t Going Anywhere,”  was written a couple of days before Hulu revealed at its NewFront presentation that it was going to allow downloads, and they’d be ad-supported for all of the Hulu users who are on the free plan. My main point was that people can only afford a limited number of subscriptions — far fewer than they’d want. So it’s great for the consumer in several ways that an aggregator like Hulu will have downloading with the ads remaining in the downloads. Hulu has 20 million subscribers, most of whom are on their ad supported plan.

Hulu had a lot of updates at its NewFront/Upfront presentation this morning, but among the most interesting for me was that Hulu will offer downloading of its content, but with ads included. Since the vast majority of Hulu’s 20 million+ subscribers are on the ad-supported plan, this means Hulu is going to be breaking some new ground in downloading, relative to its ad-free SVOD peers Netflix and Amazon, both of which have been offering downloading for a while.

Hulu has lagged its peers by not enabling downloading, but its new feature, whose specific launch date was only identified as “during the 2018-2019 upfront season,” will differentiate itself immediately by having ads included. As we all know, Netflix and Amazon have sucked an enormous amount of ad-supported viewing hours out of the ecosystem, with downloading on these services becoming a bigger contributor. By including ads, Hulu directly addresses this, allowing advertisers to at last follow viewers into their offline viewing experiences. Hulu’s light load of ads, which are unskippable, only enhances the value proposition to advertisers….

Given the rise of ad-free SVOD, more advertisers will struggle to reach their millennial audience targets with 100% brand safety and viewability, making Hulu a prime option. Hulu has also been very smart about scooping up rights to popular library content to augment its still limited (though rapidly expanding) slate of originals, led of course by “The Handmaid’s Tale” which was renewed for season 3.

So if you want to download and view Hulu content, the only way you can do it without ads is to pay for the highest level of subscription, which is Hulu with No Commercials. This is going to create a problem for millennials, who are big Hulu watchers and do not like to sit through ads or pay for subscriptions.  I think it’s a safe bet that, unless the ads become terribly onerous, the convenience of being able to watch such a large variety of popular shows on demand will outweigh the indignity of sitting through an ad. This is a recommendation for the ad industry: don’t kill the goose that lays the golden eggs. If this works, we may see other sites introducing ad supported downloads as well.