Hulu, the partially ad-supported streaming service, drives revenue through a variety of different packages and products. Sources suggest that with ads, the service drives more than double the subscription fee in revenue per user.
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.
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
