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Summary:

Hulu today announced a $2 price cut on its for-pay subscription service, Hulu Plus, reducing the price to $7.99, hoping it will goose revenues further in 2011. In this video chat from NTV Live, CEO Jason Kilar talks about company’s strategy, IPO and Hulu Plus.

jasonkilar

Hulu, the Los Angeles-based online video service, today announced a $2 price cut on its for-pay subscription service, Hulu Plus, reducing the price to $7.99 per month. The service is hoping the premium version, which is showing up on devices such as the Boxee Box and the Roku player, will help the company keep its revenues growing at a breakneck speed.

In 2008, Hulu brought in $25 million. In 2009, the company had sales of  $108 million. By the end of 2010, the company hopes to hit revenues of $240 million. In this video conversation, recorded at our NewTeeVee Live event, Kilar says he has good visibility into the next season and is confident about the future. Of course, that prompted a question about a possible initial public offering. Kilar dodged that question, and refused to comment.

When it comes to devices, I asked Kilar what the company’s strategy is around devices. He said he, “wants to be in every Internet connected device” but in order for that to happen, he wants to make sure that not only his customers, but also content owners, are happy with the arrangement.

Hulu Plus gets you to the living room via Internet-connected televisions and other such devices, he said. “We are ahead of plan on HuluPlus,” Kilar said. The number of subscriptions is ahead of where his team thought they would be, he added.

When I asked him why I have to watch ads when I pay for subscription for HuluPlus, Kilar pointed out that there is nothing preventing them from offering an ad-free HuluPlus, but the costs would be super-high. The end customers told Hulu to find a happy balance. I guess $7.99 is the magic number, and it’s the number that allows Hulu to compete with their long-term nemesis Netflix, which currently charges $8.99 a month for access to one DVD a month and online streaming.

Anyway, watch the video.

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  1. why isn’t Hulu Plus on apple tv yet? may be a good way to compete with netflix.

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    1. Who says it won’t show up soon ;-)

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  2. So, networks are used to being paid for content no one watches, as a result Hulu (standard) will continue to be blocked on TV connected devices. HuluPlus, it seems to me, is more about solving that issue than getting the full season rights.

    Kilar says Hulu is “customer focused” but considers the networks to be customers (not suppliers). I have a hard time accepting that they’re trying to deliver what viewers want when they don’t offer an ad-free version. While I’m sure their market research is correct that the vast majority would prefer $8+ads versus $25 ad-free, the work required to build both is minimal.

    Om, I appreciate your style and I know this is a confrontational question, but what I really wanted to hear was “does Hulu really want to be as profitable as possible or just put out enough content to keep people from torrenting their favorite shows?”

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  3. [...] Hulu CEO Jason Kilar on Hulu Plus, IPO, Studios [Video] // Om Malik’s talk with Jason Kilar about Hulu Plus, and his thoughts on the recent price cut to Hulu Plus.  This also makes me really want to go to a NewTeeVee Live Event. [...]

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  4. Still waiting for Hulu Plus on Google TV–or is it all hype?

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