Hulu’s Current State

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Tuesday the online video web site Hulu, stated that it had doubled its number of paying subscribers in the last year to four million. The announcement comes in the midst of some uneasiness at Hulu, as two of its owners, Walt Disney Company and News Corporation, have been hinting that they may sell. Also last month the founding chief executive of Hulu stepped down. It appears that Hulu has been struggling as of late.

Hulu held an event Tuesday for advertisers to promote several original series that will premiere on Hulu this year. Two of the shows that will be distributed exclusively are “Quick Draw”, a comedic western, and “The Awesomes”, an animated series about superheroes. These series are part of the third wave in regards to Hulu’s original content and appear to be the most ambitious.

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Despite this push towards original content, Hulu’s most popular shows remain those that it licenses from their owners and other media companies. The online television marketplace has become increasingly more competitive and content costs have risen as a response. With the rise in competition companies are looking for ways to stand out. One way to do this by commissioning shows. Hulu has done this by becoming one of two places to watch “All My Children” and “One Life to Live.” This may indicate a race starting amongst these online companies to gain the rights to certain television shows.

In addition to announcing that its paid service has topped four million subscribers for the first time, Hulu has stated it had reached a new revenue record in the first quarter. According to the company, in 2012 it earned $695 million in revenue, up from approximately $420 million in 2011. Despite this, I think that Hulu could be in trouble going forward. Online television providers in my opinion will never be able to compete with companies such as HBO in terms of original content. And when competing with Netflix, I believe that Hulu is overmatched, as Netflix has customer loyalty and is releasing original content of its own. I would not be confident if I was Hulu.

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9 thoughts on “Hulu’s Current State

  1. Good blogpost. I actually am a Hulu user and my friend has a Hulu plus account. I personally like Hulu better just because it isn’t necessary for me to be a subscribed member to be able to watch some of my favorite shows like psych, bones, etc. I agree that Hulu is no match for for Netflix since it does not have the first movers advantage as well as switching costs. I think that there is some network effects at play because the more people that are subscribed to be Netflix, the more studios will want to broadcast their shows. Right now since Hulu doesn’t have as many shows, users have no incentive to switch however, if Hulu is able to create a good original show and get more subscribers they may make progress. I hope that Hulu doesn’t crumble because I think for cheap people like me, it is a good alternative to Netflix. I think it would be a good addition if you could put up a graph of how Hulu is performing on the market.

  2. I was curious to see what was going on with Hulu these days. I use to use Hulu but now am only a Netflix user. I just don’t think that Hulu will be able to hold it’s own with Netflix as its bigger competitor. I wonder if their original series will be as successful as House of Cards on Netflix. I’m curious to see if they decide to sell the company or not and if they are able to think of new ideas that attract customers.

  3. I have a bunch of friends that use Hulu and I was wondering what exactly was the source of their success. It seems that this success is leaning toward failure. However, I would add that consumers are definitely moving toward an online video experience, so I wouldn’t count them out just yet. While Hulu may not be the superpower Netflix has become, they may just stick around longer than we think. Netflix has the first mover advantage, and so at this point Hulu is basically forced to find the markets where Netfilx has not reached, which seems to be online television rather than movies. I wonder if they plan to add any new attributes to their mission to cope with the control Netflix has over this market.
    In general, good post about a topic I was interested in. I have to agree that the CEO resigning and the owners thinking about selling Hulu is definitely a concern.

  4. I enjoyed the blog as I am currently a hulu subscriber but this brings me to an articles I read about Netflixs. Netflixs will be removing thousands on content, probably because of licensing fees, next month. Hulu will definitely capitalize on Netflix’s lost

  5. This post was really interesting to read! I am not a Hulu subscriber, myself, but I have been an avid user for years now. I am surprised that they have reached that many customers willing to pay to watch those shows online when they could watch them on other websites for free. I think that they were smart to start charging customers for their services, because now they are able to make much more profit off of what they do, while still probably keeping many customers that they had before,but are now making profits. It will be interesting to see how these new shows fare amongst all of the other already popular and established shows that hulu offers online already.

  6. Although the recent events that occurred in regards to Hulu haven’t been exactly positive, I wouldn’t count them out just yet due to that. I think that these events are not the issue that they have facing them in the future. There issue is going to be competing with other companies like Netflix. By being in this industry and market longer, they have the advantage over a company like Hulu. But there is still hope for Hulu in my eyes. The recent statistics on their highest profit to date show that they are heading in the right direction. If they continue this way, they may give Netflix a run for their money.

  7. Despite Hulu’s competition from HBO and Netflix, I think it is holding its own fairly well. Hulu centralizes all of the current running shows that I watch and by having the most recent episode available, I don’t have to change websites when I want to watch another show. In terms of older episodes and discontinued television series, Hulu is at a disadvantage because Netflix’s inventory is so much larger than that of Hulu, not to mention that with a Netflix account one can watch not only television shows, but movies as well. I agree with your opinion, if Hulu were to continue, it will face huge obstacles from strong competition, however the new high in subscribers suggests there still may be hope for Hulu.

  8. Before reading this article, I thought that Hulu wasn’t being profitable, losing its users the fierce competition to other servies that stream television shows and movies. I feel as if when viewers want to watch movies or older seasons of shows the they turn to Netflix, if they want to watch current shows then they turn to sites like projectfreetv or the network’s website, and finally original content coming from places like HBO. However, as you have mentioned in your blog, Hulu has most recently had its most profitable quater in its history and doubled its number of paying subscribers. Although I want to be quick to criticize the company, today I wanted to watch the last episode of The Office and immediately went to Hulu because I know that it would be the most reliable way to watch it. Nonetheless, Hulu has already made a name for itself within market and its going to be interesting to see how it plays out. Great post!

  9. Although Hulu just doubled the number of paying subscribers, I still feel that it’s days of success are numbered at this point. The biggest draw to Hulu in the past, at least for me, was the fact that they offered up the latest episodes to air of some of my favorite shows (like Family Guy at the time), which was very convenient for when I missed an episode. Now in 2013, however, many shows simply stream the latest episodes on their own websites, eliminating the need to go to Hulu to view them. Additionally, some of Hulu’s most popular shows, such as The Office and Family Guy, can also be found on its competitor Netflix to viewers who can wait for the release of an entire season. In general though, I’m always going to be skeptical about companies like Hulu that rely almost entirely on others (“others” being the TV and movie studios/companies in this case) as part of their core business. If the TV/movie studios start pulling back their shows, which we recently saw with Netflix, then Hulu will suffer as more and more users leave. For this reason, I think it’s smart for Hulu to create some of its own original content, however I feel that it will have a hard time catching up to Netflix when it comes to online-only TV series.

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