- What is Hulu, and how does Hulu work?
- How does Hulu make money?
- Subscription Fees
- Advertising Revenue
- Add-ons (Premium, partner, network and feature)
- Hulu’s profit and revenue
- What is the Hulu business and revenue model?
- Hulu’s funding and valuation
How does Hulu make money? Here is a full, in-depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the Hulu business model, their year-over-year revenue, and how Hulu works.
What is Hulu, and how does Hulu work?
Hulu is a subscription based video streaming service that enables customers to watch TV shows and movies online.
How Hulu works is: Hulu is a subscription only service and does not offer a free tier. So when signing up, customers can choose between four (4) different subscription plans that come at all different monthly costs. Depending on the plan chosen, customers can then stream video on demand as well as live TV.
How does Hulu make money?
According to page 5 of The Walt Disney Company’s Q2 2021 Form 10-Q, Hulu has 41.6 million paid subscribers using its video streaming service. So how does Hulu make money off of all these customers?
Below is a breakdown of how much money Hulu makes and its revenue model. Including all revenue streams and how much they charge for their services.
Here are the 3 ways of how Hulu makes money (in 2021):
Hulu has a revenue model that makes money in three (3) ways – subscription fees, advertising revenue, and add-ons.
#1. Subscription Fees
Hulu makes the bulk of its money through subscription fees. In fact, $2.9 billion or 65.9% of Hulu’s total revenue came from subscription fees in 2020.
Hulu offers four (4) subscription options: Hulu, Hulu (No Ads), Hulu + Live TV, Hulu (No Ads) + Live TV.
According to page 5 of The Walt Disney Company’s Q2 2021 Form 10-Q, Hulu has 41.6 million paid subscribers – of those are 37.8 million subscribing to SVOD Only and the other 3.8 million subscribing to SVOD + Live TV.
The average monthly revenue per paid subscriber for the Hulu SVOD Only service is $12.08, while the average for the Hulu LiveTV + SVOD service is $81.83.
Hulu Subscription Cost:
- Hulu: $5.99 per month
- Hulu (No Ads): $11.99 per month
- Hulu + Live TV: $64.99 per month
- Hulu (No Ads) + Live TV: $70.99 per month
Note: 65.9% of Hulu’s total revenue of $4.4 billion came from subscription fees in 2020.
*SVOD = subscription video on demand
#2. Advertising Revenue
Hulu also makes money through its advertising revenue – which made up for the additional $1.5 billion in revenue on The Walt Disney Company’s 2020 Form 10-K.
Hulu sells ad spots to advertisers with 16 ad placement options including on the commercial breaks you see when streaming content. The minimum ad budget required is $500 per campaign.
Note: 34.1% of Hulu’s total revenue came from advertising revenue in 2020.
#3. Add-ons (Premium, partner, network and feature)
Another way Hulu makes money is by selling add-on packages to existing customers with a subscription.
Hulu offers four (4) types of subscription add-ons: premium, partner, network, and feature.
How it works is: Once a subscriber has a subscription plan, they have the option to add on other networks like ESPN+, SHOWTIME, HBO MAX, Cinemax, STARZ, as well as additional packages such as entertainment, sports, and español content.
This type of revenue is a good example of an upselling and cross-selling business model.
Hulu Add-on Cost:
- Additional add-on packages range from $4.99 to $14.99 per month
The revenue from add-ons gets combined into the subscription fee revenue – totaling $2.9 billion for Hulu in 2020.
Hulu’s profit and revenue
In 2020, Hulu reported $4.4 billion in revenue.
Note: Because The Walt Disney Company, the parent company to Hulu, is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Walt Disney’s publicly released financial reports, including annual reports, through Walt Disney’s investor section on their website.
What is the Hulu business and revenue model?
Hulu makes money through a few revenue models that they combine within their company, they are:
- Subscription based business model
- Advertising based business model
- Cross selling business model
- Upselling business model
- B2B2C (partnerships) business model
Hulu’s funding and valuation
According to Hulu’s Crunchbase profile, Hulu has raised $683 billion over 3 rounds and has a valuation of $15.8 billion as of 2019.
On March 20, 2019, The Walt Disney Company acquired 21st Century Fox, including its 30% stake in Hulu. Bringing The Walt Disney Company’s ownership interest of Hulu to 67% giving The Walt Disney Company full control of the company.