According to a recent MoffettNathanson research, new OTT providers need to price very carefully or they might lose their target audience or cannibalize existing pay TV customers. The study noted a huge correlation between the prices and number of subscribers of an OTT service and stated that pricing should be an important factor for services such as Hulu.
The research stated that the demand curve for OTT video is steep and this means that people aren’t inclined on paying much for an OTT service. The biggest demand price for Hulu’s upcoming service is $20 per month price point, where 16% of those surveyed said they’ll buy it. However when price increased to $40, only 6.5% said they’d buy it and $55 only 2% were interested in buying.