Hulu Predicts a Breakout Year in 2015

Yesterday Hulu, the TV-streaming site, revealed its stellar success in 2014, and predicted that 2015 will be its breakout year, according to CNET. Here are the highlights:

  • Paid subscriptions are up to nearly 9 million, a 50% increase over last year. Compare that to Netflix who has 60 million global subscribers, including 40 million from the U.S.
  • 9 million subscribers x $7.99/month = $71.9 million in revenue
  • Video streams for the first quarter of 2015 are up 77%.
  • Viewers streamed over 700 million hours in Q1, an 83% increase from last year.
  • Hulu reached a deal with AMC to offer content produced in its own studio, including “Fear the Walking Dead,” a spinoff of “The Walking Dead.”

Owned by TV companies Comcast, Disney and 21st Century Fox, Hulu bridges the gap between traditional TV watching and video on-demand. TV fans can watch their favorite network programs on Hulu for free or subscribe to Hulu Plus for $7.99/month.Both versions include ads, but the $7.99 premium version includes limited ads and new episodes and current seasons of favorite shows like Empire, Dancing with the Stars, Gotham and Grey’s Anatomy, new series premiers, and full seasons of TV favorites. In most cases, the last five episodes of a current series are available on Hulu Plus. Due to licensing issues, some programs are only available on PCs, but many others can also be watched on TVs, smartphones and tablets.In its FAQs, Hulu says the ad load helps them keep the price below $8 while covering costs like licensing fees and fairly compensating their partners. However, Hulu is open to other subscription models, including a more expensive ad-free model. Intrigued consumers can try Hulu Plus for free for one-week. Gift subscriptions are also available.Insider Take:First, congrats to Hulu for a banner 2014! Doubling paid subscribers in a year is an exciting – and profitable – accomplishment. Once again, cord cutters and consumers have made their desires clear – they want choices, and they want to watch their favorite programs where and when they want. Under the “big TV” umbrella, they can do so for an affordable monthly fee.From the subscription company standpoint, Hulu seems to have found its sweet spot. It is doing a great job of providing content people want and regularly adding and refreshing that content to keep subscribers engaged and coming back for more. That’s what we all want, right?We also like that Hulu offers a free service for those willing to endure the ads, while offering a premium service for those who’d prefer fewer ads. We’d love to see Hulu try the ad-free model though. Having a tiered-subscription model gives consumers even more choices, while giving Hulu the opportunity to earn extra revenue to make up for the ad loss. We will watch Hulu throughout the year to see if their results match their predictions. 

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