This is according to the New York Times, which wrote that Hulu’s assortment of available packages – including live TV at $45 a month, ad-free video-on-demand at $12 a month, and an ad supported subscription for $6 a month.
But here’s the kicker: according to two people familiar with the business, this last offer is proving extremely lucrative for the company, which is often seen as a miniature competitor to the titanic Netflix. On top of the subscription fee, Hulu drives $15 of revenue per subscriber.
It’s little surprise that Hulu can sell high-cost advertising, it’s the peak of addressability. User accounts guarantee that a user is seeing a targeted ad, but it offers the capability and trust of a TV environment. This year, the service dropped the price of its ad-supported offer by $2.
In January, Adweek reported that Hulu had grown its ad revenue to almost $1.5 billion, a 45% year-on-year increase. In the same period, it also drove 48% subscriber growth.
CEO Randy Freer is optimistic about the growth of ad-funded online TV, growth that he believes his service is primed to capture. “Hulu does this with a viewer-first ad experience that has less commercial interruption, with ad breaks that are shorter and ads that are more relevant.”
This follows the news of AT&T’s sale of its 9.5% stake in Hulu back to the company for $1.43 billion, at a valuation of the entire company at $15 billion, according to CNBC, a big jump from November when the company was valued at $9.3 billion.
Sourced from the New York Times, Adweek, CNBC