Hulu is an American subscription-based streaming service that offers a variety of TV shows, movies, and original content. It was founded in 2007 by Jason Kilar, Beth Comstock, and various others.
Hulu operates under a subscription-based model where users pay to receive access to an on-demand streaming service. The service offers both ad-supported and ad-free base plans to its users with the option of adding extras for a fee.
Hulu’s business model is also supported by an exceptional user experience that enables it to upsell consumers to a more expensive plan. The company’s ability to negotiate strategic partnerships is also a key component.
Hulu is an American subscription-based streaming service that offers a variety of TV shows, movies, and original content. It was founded in 2007 by Jason Kilar, Beth Comstock, and various others and is now majority-owned by The Walt Disney Company.
Element
Description
Value Proposition
Hulu offers a range of value propositions for its customers: – Content Variety: The platform provides a diverse library of on-demand streaming content, including movies, TV shows, original series, and documentaries. – Personalization: Hulu offers personalized recommendations based on user preferences and viewing history, enhancing the content discovery experience. – Ad-Supported and Ad-Free Options: Users can choose between ad-supported and ad-free subscription plans, providing flexibility in viewing experience. – Exclusive Originals: Hulu produces exclusive original content, including acclaimed series and films. – Live TV: Hulu + Live TV offers live streaming of TV channels, sports events, and news, combining on-demand and live content in one platform. – Device Compatibility: Hulu is accessible on various devices, including smartphones, smart TVs, gaming consoles, and streaming media players.
Core Products/Services
Hulu’s core products and services include: – On-Demand Streaming: The platform offers a vast library of on-demand streaming content, including current TV episodes and a wide range of past seasons and episodes. – Hulu Originals: Hulu produces and streams exclusive original content, including series, films, and documentaries. – Hulu + Live TV: This subscription tier combines on-demand streaming with live TV channels, sports coverage, and news broadcasts. – Personalized Recommendations: Hulu provides personalized content recommendations to users based on their viewing behavior and preferences. – Ad-Supported and Ad-Free Plans: Users can choose between plans with ads or opt for an ad-free viewing experience. – Multiple Device Access: Hulu is accessible on smartphones, tablets, smart TVs, gaming consoles, streaming devices, and web browsers.
Customer Segments
Hulu’s customer segments include: – Entertainment Enthusiasts: Individuals who enjoy streaming a wide variety of movies, TV shows, and original content. – Cord-Cutters: Consumers who have opted to cancel traditional cable or satellite TV subscriptions in favor of streaming services. – Sports Fans: Users interested in live sports coverage through Hulu + Live TV. – Families: Households seeking family-friendly content and the flexibility to stream on multiple devices. – TV Series Fans: Those who follow specific TV series and enjoy binge-watching past seasons. – Advertising Partners: Advertisers and brands looking to reach Hulu’s user base through targeted ads.
Revenue Streams
Hulu generates revenue through several revenue streams: – Subscription Fees: The company earns revenue from monthly subscription fees charged to users for its ad-supported and ad-free plans. – Hulu + Live TV: The live TV subscription tier generates additional revenue through monthly fees for access to live TV channels and sports content. – Advertising: Hulu monetizes its ad-supported plans by displaying advertisements to users, with revenue coming from advertisers. – Hulu Originals: Exclusive content and original productions can attract and retain subscribers, contributing to revenue. – Add-Ons and Premium Channels: Hulu offers add-ons and premium channel subscriptions (e.g., HBO, Showtime) for an extra fee, generating additional income. – Partnerships: The platform may form partnerships and collaborations with content providers, generating revenue-sharing arrangements.
Distribution Strategy
Hulu’s distribution strategy focuses on accessibility, partnerships, and content acquisition: – Device Compatibility: Hulu ensures compatibility with a wide range of devices, making it accessible to users on smartphones, smart TVs, gaming consoles, and streaming media players. – Partnerships: The platform partners with content providers, studios, and networks to secure licensing agreements for a diverse content library. – Advertising Partnerships: Hulu collaborates with advertisers and brands to deliver targeted advertising campaigns to its user base. – Content Acquisition: Hulu acquires licenses and rights for both on-demand and live content, securing access to popular TV shows, movies, and sports events. – Original Content Production: The company invests in producing exclusive original content to attract and retain subscribers. – Global Expansion: Hulu may consider expanding its services to international markets, increasing its reach and user base.
Table of Contents
Understanding Hulu’s business model
Hulu operates under a subscription-based model where users pay to receive access to an on-demand streaming service.
The service offers both ad-supported and ad-free base plans to its users with the option of adding extras for a fee.
These extras include Live TV, Disney, ESPN, HBO Max, Cinemax, SHOWTIME, and STARZ.
Hulu’s approach is based on targeted advertising which means that ads are tailored to the viewer’s interests and behavior. The company also offers Hulu Ad Manager; a self-service ad solution where businesses of all sizes can launch, manage, and track campaigns.
While the company cannot compete with Netflix on self-produced content, it has partnered with most of the cable networks in the USA and appeals to consumers who are not quite ready to abandon television.
Exceptional user experience
Hulu’s user experience is simple and intuitive to make it easier for subscribers to find and watch their favorite shows.
The company offers personalized recommendations based on viewing history, and features such as Live TV and offline downloading broaden the platform’s appeal when compared to competitors like Netflix.
Hulu did not excel in this area until recently, but the company now understands that great content must be paired with great UX and UI to remain competitive. The platform now incorporates modern web design trends with bold typography, depth utilization, and immersive layouts.
In this way, the company utilizes its exceptional user experience as a tool to encourage customers to subscribe to a more expensive plan.
Strategic partnerships
Hulu has formed strategic partnerships with other companies to expand its reach and offer additional benefits to subscribers. For example, it partnered with Spotify in 2019 to offer a discounted bundle of their services to new and existing Spotify premium members.
The company has also more recently partnered with telco provider Sprint, with those subscribed to the Sprint Unlimited Plan able to access Hulu for free.
Hulu’s ability to form strategic partnerships is also evident in the way it licenses content. Since the company is a relative newcome to self-produced content, it has through necessity developed the ability to enter into collaborations with various content providers.
These include television networks such as NBC and ABC, cable networks such as FX and Bravo, and movie studios like Lionsgate.
In January 2023, Hulu announced a multi-year content partnership with Fox Entertainment. In addition to securing the rights to Fox’s extensive library of hit shows, the Hulu brand would be promoted on all Fox-owned marketing touchpoints.
Key Highlights:
Hulu’s Overview: Hulu is a subscription-based streaming service that offers TV shows, movies, and original content. Founded in 2007, it’s majority-owned by The Walt Disney Company.
Subscription-Based Model: Hulu operates on a subscription-based model, offering both ad-supported and ad-free plans. Users can also add extras like Live TV, Disney, ESPN, HBO Max, and more for an additional fee.
Advertising Revenue: Hulu generates advertising revenue through targeted advertising, tailoring ads to viewer interests and behavior. It offers Hulu Ad Manager for businesses to manage and track campaigns.
Market Position: Hulu holds about 18% of the subscription video-on-demand (SVOD) market share, second only to Netflix. Its partnerships and content licensing make it appealing to viewers who aren’t ready to abandon traditional television.
User Experience: Hulu focuses on an exceptional user experience with personalized recommendations, Live TV, offline downloading, and modern web design trends. It uses this experience to encourage customers to subscribe to higher-priced plans.
Strategic Partnerships: Hulu forms partnerships to expand its reach and offer benefits to subscribers. It partnered with Spotify to offer a bundle, and with telco provider Sprint, providing Hulu for free to certain subscribers.
Content Licensing: Since it’s newer to self-produced content, Hulu has established collaborations with content providers such as NBC, ABC, FX, Bravo, and Lionsgate. Partnerships like the one with Fox Entertainment extend its content library.
Netflix is a subscription-based business model making money with three simple plans: basic, standard, and premium, giving access to stream series, movies, and shows. Leveraging on a streaming platform, Netflix generated over $29.6 billion in 2021, with an operating income of over $6 billion and a net income of over $5 billion. Starting in 2013, Netflix started to develop its own content under the Netflix Originals brand, which today represents the most important strategic asset for the company that, in 2022, counted almost 223 million paying members worldwide.
Binge-watching is the practice of watching TV series all at once. In a speech at the Edinburgh Television Festival in 2013, Kevin Spacey said: “If they want to binge then we should let them binge.” This new content format would be popularized by Netflix, launching its TV series all at once.
Coopetition describes a recently modern phenomenon where organizations both compete and cooperate, which is also known as cooperative competition. A recent example is how the Netflix streaming platform has been among the major customers of Amazon AWS cloud infrastructure, while Amazon Prime has been among the competitors of the Netflix Prime content platform.
Netflix is among the most popular streaming platforms, with a subscription-based businessmodel. The brand, platform, and content are strengths. The volatility of content licensing and production are weaknesses. The streaming market is a potential blue ocean. The inability to attract and retain premium members and its fixed long-term costs threaten its businessmodel.
Netflix’s largest individual shareholder is Reed Hastings, co-founder, and CEO of the company, with a 1.7% stake, valued at over $1.8 billion in 2022. Netflix runs a subscription-based business model that generated $29.6 billion in revenues, and it had over 221 million global members in 2021. Netflix’s business model runs only premium content on its platform, driven by its Netflix Originals shows. Netflix is also building an ad-supported version.
Netflix generated over $31.6 billion in revenue in 2022, compared to $29.7 billion in 2021. Netflix was profitable in 2022, as it generated almost $4.5 billion in profits.
Netflix had over 74 million paying members in US & Canada, over 76 million in the EMEA region, almost 42 million in the LATAM region, and 38 million in the APAC region.
The most significant geography in terms of average monthly revenue per subscriber in 2022 was US & Canada, with $15.8, compared to $10.99 in the EMEA region and $8.50 in APAC and LATAM.
In 2022, The Walt Disney Company’s total paid subscriber base was larger than Netlfix, with over 235 million paid members, compared with Netflix’s over 230 million members. However, Disney’s offering is fragmented among Disney+, ESPN+, and Hulu, compared with Netflix, which has a single offering.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
