Hulu Ended Q2 With 875,000 Paid Hulu Plus Subscribers
CEO Jason Kilar in a blog post says the firm, which is on the auction block, will cross the 1 million mark later this summer, well ahead of schedule, and remains on pace to approach $500 million in revenue this year.
NEW YORK - Hulu CEO Jason Kilar in a blog post on Wednesday said the online video joint venture has reached 875,000 paid subscribers to its $7.99 a month Hulu Plus service as of mid-year and will exceed its 1 million user target "before the end of this summer" rather than around the end of the year as previously envisioned.
"It’s been a big second quarter," he said. "We remain on pace to approach half a billion in 2011 revenue."
Hulu is owned by Walt Disney, News Corp., NBCUniversal and Providence Equity Partners, but the company is currently on the auction block. A possible sale is also expected to be a topic of debate at this week's Allen & Co. gathering of media and tech moguls in Sun Valley, Idaho where Disney CEO Bob Iger said earlier in the day that the Hulu owners are committed to a sale.
Kilar didn't comment on the sales process on Wednesday.
"The slope of Hulu Plus’s subscriber ramp is higher than we previously forecasted," the Hulu boss emphasized in his blog post though. "We just closed our biggest month in Hulu Plus paid subscriber net additions by a healthy margin; we added more paying subscribers in June than we did in April and May combined."
In the paid service's first seven and a half months, Hulu has already reached over a million subs when including those in a one-week free trial period, he said. "We are extremely encouraged by the ramp of this business."
Kilar also highlighted the benefits for content partners. "Today, we proudly and profitably pay the content community approximately $8 per subscriber per month for the content offering you see today on Hulu Plus," he wrote. "A portion of the $8 payment to the content community comes from our $7.99 subscription fee; the balance comes from the revenue we generate through advertising."
As Hulu Plus expands further, "we believe significantly more dollars in aggregate will move to the content community than has historically been the case in the industry," Kilar highlighted, calling it a "very positive trend" for the content community. "These economics are made possible by our ability to thrive on low margins and the unusually effective Hulu advertising service we’ve built and will continue to innovate."
In the second quarter, Hulu remained the leader in U.S. online video advertising with the largest market share in terms of revenue, according to the CEO. Hulu serves nearly twice the number of video ads of the next largest competitor, he said, citing comScore data.