Hulu has decided to reduce the cost of their basic service tier while keeping their ad-free SVOD service at where it is. This change could be a serious threat to Netflix. Deseret News reports that while Netflix announced its plan to increase its prices, Hulu did the reverse.

Hulu has reduced the cost of its basic streaming package while increasing the cost of the live TV package. Deadline reports that some wonder whether Netflix is starting to worry. While this may be a threat to Netflix, there is a distinct difference between each streaming service.

Hulu offers a live TV package, while Netflix does not offer a similar package.

Netflix and Hulu are fighting to stand out as competitors grow

These two streaming giants are finding ways to outperform its competitors against the growing number of streaming services including Disney+ and WarnerMedia's planned streaming service. Hulu has begun to focus on live TV, while YouTube has gone a similar route. Internet TV is becoming the future, as the audiences continue to grow, showing that people want to watch TV, while not being forced to sign a two-year contract with a cable provider.

The SVOD is becoming more popular, and this appears to be Hulu's secret weapon against Netflix. Hulu has reduced its costs as Netflix increases its cost.

Netflix's price increase is aimed at paying for Original series

According to Fox Business, Netflix's expansive library of original shows and films separates itself from Hulu. While some are angry over the increased prices, Netflix has said the money is going towards new Original content. Netflix needs more Original content to compete with upcoming platforms such as Disney+ and Warner Media's planned service.

What also is causing Netflix to increase its costs, is their costs to acquire rights to stream other companies shows and films. Netflix is forced to pay a major cost to keep "Friends" for another year. If fans want to continue binge-watching shows like "Friends," fans will have to pay a bit more each month. Hulu's basic tier cost goes from $5.99 to $7.99.

Hulu's plan with Spotify add-on with remain at its current price. Hulu has announced that they have over 25 million subscribers.

With Hulu being owned by NBC, Disney, and Fox it's not being forced to pay high licensing fees. With the SVOD, there's not much incentive for original content. The Netflix price increase has been their largest since their debut 12 years ago.