Hulu is keeping its pedal to metal in the streaming TV race: The company said it ended 2018 with more than 25 million total subscribers, a net gain of 8 million for the year.
The 47% year-over-year growth in subscribers for 2018 gives Hulu more video customers than the U.S.’s biggest pay-TV providers — including Comcast, one of its owners. But that’s not purely apples-to-apples: Hulu does not break out how many of its subscribers are only on subscription video-on-demand plans versus how many have live TV packages (which include access to the SVOD content).
Meanwhile, in another data point intended to highlight its momentum, Hulu claims it grew ad revenue more than 45% in 2018, to nearly $1.5 billion, a company record.
However, Hulu isn’t profitable — and its losses have mounted as the streaming-TV provider invests more in technology and content. Hulu lost as much as $440 million during the third quarter of 2018, more than double a loss of $207 million a year earlier and up from a loss of $357 million in Q2, according to regulatory filings by Comcast and 21st Century Fox. (The parent companies do not disclose Hulu’s revenue.)
Hulu competes against SVOD players like Netflix — which has more than twice the U.S. streaming subscribers — and Amazon Prime Video as well as over-the-top live TV services, including DirecTV Now, Sling TV, and YouTube TV. To build up its base, Hulu has launched heavily discounted promos including one timed for Black Friday offering the SVOD plan with ads for $12 in the first year. So there’s a question of how many customers will roll off once their promotional pricing expires.
By continuing its aggressive investment, Hulu believes it can stand out from the streaming pack with a unique offering that blends live TV and a large on-demand selection, including exclusive and original series. According to the company, customers who subscribe to Hulu With Live TV spend around 50% of their time watching VOD or recorded programming. And the average time spent on Hulu per subscriber each month increased 20% in 2018 (although it didn’t provide actual figures for watch time).
“Consumers have spoken loudly about their desire for more choice and control in their TV experience,” Hulu CEO Randy Freer said in a statement. “They are seeing the enormous benefits of streaming, they’re deciding which content and brands are most important to them, and they’re choosing Hulu.”
But to keep Hulu growing — and to turn it into a profitable business — its parent companies will need to pump in more cash and likely sustain ongoing losses in the near future.
