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Hulu to drop the price of its basic plan

Posted at 2:07 PM, Jan 23, 2019

(CNN) -- Hulu has dropped the price of its cheapest package by $2 — just a week after competitor Netflix raised prices for its services.

Hulu's basic plan, which includes ads, will cost $6 per month starting February 26, the company announced Wednesday.

The streamer also said that it will raise the price of its Live TV plan to $45 per month, a $5 increase. The price of its on-demand plan without ads will remain the same at $12.

Wednesday's news comes in the wake of Netflix's decision to raise prices in the United States. All three of that company's plans will increase in price by $1-$2, which means the most basic version of Netflix will cost $9. Unlike Hulu, Netflix does not have ads on any of its plans, nor does it offer a service with live TV.

Hulu has spent the last year focusing on domestic subscription growth. The company announced earlier this year that it added eight million new subscribers in 2018, bringing its total to 25 million. It also grew advertising revenue to nearly $1.5 billion last year, the most in the service's history.

The company's gains in the United States last year were actually larger than Netflix's — the latter streamer added about 5.7 million paid domestic subscribers, according to it most recent earnings report .

Still, Hulu is nowhere close to passing Netflix, which says it has roughly 58 million paid subscribers stateside. Unlike Hulu, Netflix has global reach — and with that, about 139 million paid subscribers overall .

Netflix stock, though, has struggled since the company last reported quarterly results. Shares were down another 1% mid-Wednesday.

Hulu is owned in part by Disney, which will increase its stake to 60% after its deal for most of 21st Century Fox closes. Comcast owns 30%, and AT&T's WarnerMedia owns the remaining 10%. WarnerMedia is also the parent company of CNN.