Hulu Cuts Paid Service’s Price 20% to Take On Netflix

Hulu LLC, the video website owned by three of the biggest U.S. broadcast networks, reduced the price of its paid service by 20 percent after an initial trial period, stepping up competition with Netflix Inc.

The Hulu Plus monthly subscription costs $7.99, the Los Angeles-based company said today in a statement. The price during the trial period, announced in June, was $9.99.

Hulu Plus allows subscribers to watch movies and current and past seasons of television shows such as “Glee” and “House” on computers, mobile devices and Internet-connected TVs. The new price goes head-to-head with Netflix, which began testing a $7.99-a-month online streaming-only service in the U.S. last month. Netflix had been offering streaming programs and DVD rentals by mail for as low as $8.99.

Programs on Hulu and Hulu Plus are primarily from owners ABC, Fox and NBC. Users who subscribed during Hulu Plus’s $9.99- a-month preview period will receive a credit toward their next billing cycle, the company said today. New subscribers will get a one-week free trial.

Previously, Hulu offered a smaller selection of shows and episodes for free and depended solely on advertising revenue. The closely held company still offers a free version that provides some movies and the five most-recent episodes of shows such as “Family Guy.”

Hulu was founded in 2007 by General Electric Co.’s NBC Universal and News Corp.’s Fox. Walt Disney Co.’s ABC and private-equity firm Providence Equity Partners Inc. are also investors.

To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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