It makes perfect sense. Money from subscriptions is good; extra money from ads is better. And as much as you or I dislike it, we're probably in a minority position here - if it was really cutting into earnings, they'd have cut it out by now.
Hulu having ads isn't about the money they make. It's about keeping ads as normal in peoples minds. If Netflix and Hulu and any other online only vod dropped all ads then people might start to resent ads, and seem them as abnormal. Then people will watch less network and cable TV, which need ads.
There's product placement in some programmes, for example the Netflix-produced House of Cards contains jarring product placement for the Playstation Vita.
There is a lot of product placement in most TV shows this was just poorly done. If someone says a brand name or you see a logo long enough to read it than chances are that's product placement. EX: Someone's drinking a beer/soda I'd you see the label it's deliberate.
There are not ads on Netflix. I wasn't being clear enough. I meant that if there are video on demand services like Netflix without ads then people will see ads as a discomfort in vod services with ads, like Hulu.
Well most people pay for basic cable and most of those channels have ads.
Granted HBO and Netflix don't have commercials but I think they also both use product placement (edit: see granddaughter comment for more info) in their original content so it's not like there's some philosophical commitment they've made to not show subscribers ads to pad the bottom line.
Honestly they should just add another tier with no ads.
$8: Hulu with x ads per show.
$9: Hulu ad free.
There was a True Blood/Apple image series atop reddit not too long ago but Googling reveals that HBO insists that they don't raise money for product placement but allow writers to use products so score one for HBO.
Humorously, Apple claims they don't pay for product placement but they do give devices away which is supposed to be different I guess.
Netflix ran into problems with Lillehammer due to Norwegian law against paid placement.
House of Cards with non-paid for Apple advert below:
Just to go further into the numbers Hulu makes quite a bit from the ads. Link [1] is from Feb 2011 when Hulu was making 14.3 cents per episode.
That means if you were watching 2 episodes a day Hulu was making more from you in a month from ads then from the Hulu Plus subscription. And I think ads have noticeably increased since 2011. I guess we know why that autoplay next episode kicks in so fast. And I guess it goes to the true cost of these licensing deals and why Netflix has a much worse tv selection that's a year old.
Apple has a team devoted to making Apple products easy to use in productions, and aggressively courts producers. But they don't "pay". It's exactly the same as how companies send press releases (and demos) to lazy journalists to reprint as news.
I saw it in House of Cards. You just might not notice it if you already had the products shown. It wouldn't seem unusual to you. I don't know about Game of Thrones, but I would guess some manufacturers of sharp objects, alcohol, and clothes were subtly inserted. Maybe some beer company ran an "as seen on Game of Thrones" ad.
My understanding is that the Hulu subscription pays for fixed overhead (and profit), and the ads pay for marginal licensing. That might be a lie, though.
