Hulu has entered 2010 on a high, serving one billion videos in December 2009. And yet the company is facing new challenges, namely how to make the service a profitable one. Paid options are definitely on the way but it looks likely there’ll always be a free option.
Hulu – From Zero To Hero
After a short beta, Hulu launched fully in early 2008 with few people predicting it would become the success it has done. But the last two years has seen the service grow in popularity by a huge amount, with only a slight dip in the middle of last year.
But that trend now looks to have been reversed, with Hulu once again growing. With Disney now on board, and content partners and sponsors increasing in number, things are definitely looking good for Hulu.
One Billion Videos
The last time we looked at Hulu usage stats the monthly record was 924 million streams. But that has now been superseded, with ComScore reporting Hulu served more than one billion videos in December. In an interview with USA Today, Hulu CEO Jason Kilar described it as “a great milestone.”
At the end of 2008 Hulu was serving 240 million videos a month. In the space of a year that figure has been quadrupled, which is growth I think most sites (with the exception of Google and YouTube) would be happy with.
Paid Vs. Free Options
may well already be profitable but the company is refusing to disclose this information. However, profitable or not, Hulu is looking at new ways of making money. Last year the first talk of charging for access, with Rupert Murdoch being the driving force behind the effort.
Kilar has now promised there will always be a free version of Hulu but that still leaves a lot of scope for charging for access.
Forrester Research analyst James McQuivey believes Hulu is eyeing up two different pricing tiers. $4.99 a month would buy viewers an ad-free Hulu, with $14.99 a month ending the four-episode limit and open up complete seasons and a huge back catalog of content.
Conclusions
This seems a sensible approach: keeping Hulu free and ad-supported for those who want it, while also giving people more options. The premium package will be most attractive to people who currently buy box sets of TV shows on DVD or Blu-ray.
2009 was a good year for Hulu and I suspect 2010 will be even better.
