Only five years after some wondered whether people really wanted to subscribe to TV reruns, or thought that networks were daft to support it, Hulu understandably has reason to crow a bit. CEO Mike Hopkins announced yesterday on the company blog that the cross-platform online TV service would exceed $1 billion in revenue this year. It earned $695 million in 2012. “When you think about the fact that Hulu first launched out of beta in 2008, it's quite an impressive feat to scale the business from zero to $1 billion over the course of just six years.”
In order to get past the $1
billion mark, Hopkins and co. needed to achieve scale both in paid subs and in reach to attract traditional TV advertisers. Hopkins says the company passed by the 5 million monthly subscriber mark
earlier this year -- up from just over 3 million last year. But the real driver of growth has been user migration to the paid Hulu Plus product off of the desktop. Hopkins says that about half of paid
subscribers are streaming the service to a range of devices -- most notably set-top boxes and game consoles like Xbox/PS4, Chromecast, Apple TV and Roku. The service is also available on most
smartphones and tablets.
Hopkins did not say how much of Hulu's revenue is coming from paid subscriptions vs. advertising. The 5 million subscribers are paying $7.99 a month to access the full library across screens, which means that something more than half of Hulu revenues are coming from ads. According to comScore's metrics for November, Hulu served about 1.4 billion video ads, ranking eighth among the top ten video ad properties. While serving fewer ads overall and to a smaller audience than AOL or Google, Hulu continues to beat all other video ad networks and publishers in the number of ads its average user sees in a month. Hulu viewers saw on average 88 video ads on the service, compared to 31 ads seen by Google/YouTube viewers in the month.
Hulu still has considerable catching up to do if it wants to rival Netflix, which has over 40 million members. But Hulu clearly is following the path that Netflix has been pioneering. Hopkins emphasized that Hulu not only distinguishes itself from the competition with its full access to current-run TV programs, but it now hosts over 2900 TV series. In addition, like rivals Netflix and Amazon, Hulu has also entered the original series race. It launched over 20 original shows in 2013, he announced -- and plans to double that number over the next few years.” Hopkins says the most popular original programs on Hulu, such as "The Awesomes" and "Behind the Mask," were among the top ten most-viewed shows in the weeks when new episodes were released.