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Summary:

Hulu’s CEO Jason Kilar reiterated that the video service is expected to double its revenue in 2011 and is expected to hit 1 million paid subscribers. The figures point to the larger effect that Netflix and Hulu are having on consumer behavior and also hardware sales.

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Hulu’s CEO Jason Kilar reiterated that the video service is on pace to double its revenue in 2011 and is expected to hit 1 million paid subscribers this year. The numbers, shared in a blog post, mirrors similar projections from Hulu earlier this year but now has the data from the first quarter to back it up.

The numbers by themselves are impressive and show that the momentum behind online video services shows no signs of letting up. According to Kilar:

  • Hulu is pace to hit half a billion dollars in revenue in 2011 after recording $263 million in revenue for 2010. Hulu previously hit $108 million revenue in 2009.
  • First quarter revenue for Hulu grew approximately 90 percent over the same period in 2010.
  • Hulu is on pace to hit 1 million paid subscribers of Hulu Plus, which launched in November.
  • Hulu’s advertiser base grew 50 percent from 194 in the first quarter of 2010 to 289 in the first quarter of this year.
  • Hulu’s content partners, which is now up to 264, is expected to earn $300 million through Hulu in 2011.

But the latest figures also point to the larger effect that Netflix, Hulu and others are having on consumer behavior and also hardware sales. As my colleague Ryan Lawler reported yesterday, an estimated 2 million households are expected to have cut the cord and drop paid TV services in favor of broadband video services between 2008 and 2011, according to Convergence Consulting Group. Though the pace of cord-cutting is expected to slow this year, it is still happening at a faster rate than in 2008 and 2009.

But the growth of Hulu is also having an effect on hardware set-top box sales. Infonetics Research said that the growth of Hulu and Netflix helped the sale of standalone set-top boxes such as Roku, Boxee and Apple TV almost double from the third quarter of 2010 to the fourth quarter of 2010. The video services are also helping fuel sales of hybrid set-top boxes that mix cable and satellite content with online video.

“In the fourth quarter of 2010, we witnessed the dramatic growth of over-the-top services, as service providers and equipment vendors hit the ‘sweet spot’ for pricing,” wrote Teresa Mastrangelo directing analyst for video at Infonetics Research.

There are still a lot of challenges ahead for online video services, which must work hard with content partners to procure attractive libraries. And the money at stake is still small compared to what traditional paid TV providers make. But the continued breakout growth of services like Hulu show that the interest in online video is still hot, which has implications beyond just Hulu’s bottom line.

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  1. Interesting figures, especially after indications that Hulu is on a decline and misses corporate support from the mayor broadcaster who own the platform!

  2. Mark Pilatowski Wednesday, April 6, 2011

    I suspect Hulu’s numbers include those who signed up for a free trial when they bought a new internet connected device. Many of those same people will cancel because paying a subscription fee while getting served ads every 5 minutes sucks. I had the free trial for 1 day and stopped using it for that reason. I don’t mind paying a for a subscription but I expect to avoid constant commercial interruption if I do pay.

    1. Yes, it isn’t the best consumer experience. But I’m sure you remember this same exact thing happening with cable television. It was supposed to be commercial free, with programming covered by the viewers’ subscription fees. We all know how long that lasted… If viewers will tolerate ads, platform owners will ALWAYS

  3. I don’t mind paying and see the ads, but they were a bit too much. My biggest complaint was that the content I wanted was on Hulu.com, but not on Hulu Plus. I would have gladly paid the $8 a month to be able to stream Hulu through my PS3. But since I have to buy a new computer for my living room to watch Hulu, I dropped the $8 paid portion of it.

  4. Another consequential mass delusion. No one can bear HULU et al for very long. It’s just like all the other rubbish . . . swamped in intrusive advertising. So massively lame. It’s as unbearable to watch as regular TV.

    I’d love to meet one of the knuckleheads that invested cash into this deal. Wow, there’s one born every minute I guess.

  5. When Hulu is available on XBox, do you expect the number of subscribers to jump dramatically again, based on the set top box statement above?

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