Hulu Reaches One Million Subscribers
Hulu now has over one million paying subscribers, good news for partners in the joint venture who are currently looking to sell. The online video service is owned jointly by NBCUniversal (NASDAQ:CMCSA), Fox (NASDAQ:NWSA), Disney (NYSE:DIS), and Providence Equity Partners, who put the service up for sale earlier this year.
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Hulu CEO Jason Kilar announced Wednesday that Hulu’s paid subscription service, Hulu Plus, had reached the one million users by the end of the summer. Hulu’s earlier forecast estimated that the service would reach the milestone at the end of the year.
Hulu only introduced its subscription service late last year, before which the company relied on advertising to pay for its streaming video. The service was originally created to stream its owners’ content, but has since grown, investing $375 million or more in additional content just this year, from both Hollywood studios and television partners, after taking in over $500 million in revenue.
However, many programmers have been reluctant to work with Hulu, as the service could undercut existing relationships with more traditional pay-TV distributors like Time Warner Cable (NYSE:TWC) and DirecTV (NASDAQ:DTV). And Hulu doesn’t yet have the the numbers to compete with Netflix (NASDAQ:NFLX), which recently overtook Comcast (NASDAQ:CMCSA) to have the most paid subscriptions of any TV or video service, streaming or otherwise.
Despite the new milestone, and the continuing profitability of the service, Hulu’s owners are still “fully committed” to selling it, according to Disney chief executive Bob Iger. However, critics say the plan to sell is unwise, given that it is a major distribution channel for its owners’ content, and in a sale could go to competitors like Google (NASDAQ:GOOG), Apple (NASDAQ:AAPL), or Amazon (NASDAQ:AMZN), all three of which own their own television services — Google TV and YouTube, the iTunes Store, and Amazon on Demand and Amazon Prime, respectively.
Hulu’s current asking price is around $2 billion.