Hulu Plus Having a Growing Impact on Bottom Line
Rumors have swirled since early summer that Hulu was up for sale, but that has not stopped the company from pushing ahead with it business plans and seeking out new content. Hulu’s CEO, Jason Kilar, recently posted an update on the company’s Q3 performance on the Hulu Blog in which he highlighted Hulu’s newest major content partner, Univision, which he expects will help Hulu grow its influence with the U.S.’s increasingly influential Hispanic population.
Kilar also highlighted the growth of Hulu Plus, the company’s premium subscription service. According to Kilar, Hulu Plus is now available on 120 million devices and has garnered over a million subscribers, which by Hulu’s calculations, makes Hulu Plus the fastest ramping video subscription service. All of this in less than a year since exiting the invite-only phase for Hulu Plus and right on the heels of launching in Japan. As a result of all this momentum, Kilar expects Hulu Plus to represent more than half of the company’s revenue within 12 months.
The Hulu Plus revenue target comes with a caveat: Kilar didn’t actually say that more than half of the company’s revenue will be based on subscription fees, because Hulu Plus also shows ads. However, the emphasis on Hulu Plus and subscription revenue is definitely noteworthy, particularly because Kilar has in the past wasted no opportunity to talk about the importance of advertising revenue for his company.
I’ve never quite understood Hulu Plus. Hulu Plus content not only has ads, but has just as many ads as the free Hulu content, and Hulu has stated in the past that their goal is grow the ad rolls in their content to a level comparable to the major networks, or about 20 minutes of advertising for every hour of content. I know that Hulu’s big advantage is its relatively short release window after original air date, but I think it’s going to be hard for Hulu to continue to push that model for their subscription service as Netflix and Amazon grow out their ad-free television content libraries.