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Hulu Plus on Track for 1 Million Subscribers

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Hulu LogoCEO of Hulu, Jason Kelar, said some pretty interesting things a few days ago on Hulu’s blog upon wrapping up the first quarter of the year. For a while now there’s been talk about an eventual Hulu IPO, and, in order to get its money’s worth, the company has to share enough information to let people know just exactly how much it’s worth.

The news that matters most to people in general though is the streaming service’s total reach. This defines cultural impact and helps show trends in the overall industry. As many already know, Hulu has added a new feature to the site last summer called Hulu Plus, which allows access to a much larger variety of series and episodes through Hulu. It wasn’t well received as many questioned paying $9.99/month for a feature that doesn’t eliminate commercial interruptions. In a move many described as a bad omen for the subscription service, Hulu decreased the price to $7.99/month in November. Regardless of the initial reception, Hulu Plus is now on track to reach 1 million subscribers by year’s end. As a point of reference, Netflix now has more than 20 million subscribers and is said by the company to be on pace to soon reach 23 million in North America.

In another bit of news for Hulu, revenue has risen about 90% from the same time last year, so the company fully expects to do $500 million in in revenue in 2011. In all of 2010, Hulu made $263 million in revenue, but for half the year there was no Hulu Plus subscription service lining the coffers. While this certainly helps, it will end up contributing less than $100 million in revenue for Hulu, so where is the additional money coming from?

Ads. Hulu is only up 10% in streams on the same time last year, but they’re making more money. Why? Because they’ve attracted more advertisers. Hulu now has 289 advertisers (up from 194 last year) competing over the same slots which equates to advertisers having to pay more this year for the same air time last year.

Things are looking awfully rosy for Hulu, but many have to question the company. In a time when they should be booming due to increased accessibility through television boxes and an overall growing acceptance of internet streaming for content industry wide, Hulu Plus is not even at one million subscribers yet. To make matters worse, this isn’t a case of people not knowing about Hulu Plus, it’s a case of them not wanting the service. If Hulu ever expects to reach Netflix-like popularity something will need to change with their model otherwise they’re destined for mediocrity.

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