/// Hulu’s New Plan: Compete with Netflix and Amazon. How is Hulu Going to Pay for That?
So they’re not selling . But what are Hulu’s owners going to do with the video service now? The immediate response to that question, via people who provide answers on behalf of Hulu’s owners, and translated a bit for public consumption: They are going to invest in Hulu’s potential as a “subscription video on demand” service. That is, they see real value in building up its Hulu Plus paid offering. Which is competing for eyeballs, time and consumer dollars with Netflix and Amazon. That makes sense. Yes, Hulu, which generated $690 million last year, can also be valuable as a free Web site that provides some “catch up” content from its three TV network owners (Disney/ABC, Comcast/NBC, 21stCenturyFox/Fox). It can also function as a hub for not-exactly free content for “authenticated” pay TV customers (see the Dish/Fox/Hulu deal from 2011 ). But Hulu Plus has turned out to be surprisingly popular, with more than 4 million people paying $8 a month for a subscription, even though the stuff they pay to see still has ads (Netflix and Amazon’s stuff is ad-free). While that places the service way behind Netflix and its 30 million U.S. subscribers, Hulu may well be ahead of Amazon when it comes to video eyeballs . Hulu’s managers have been campaigning for years to get more cash from their owners, so the money-losing service could compete even more effectively. They want to spend more on other people’s content, and make more of their own. One problem with that theory, though: If Hulu is going to compete with Netflix and Amazon, it may need a lot more money than it has, even though its owners have committed to giving it $750 million in fresh cash. I’m assuming that the contribution isn’t going to be an annual thing, but am trying to get Hulu’s owners to confirm that one way or another. But even if Hulu’s owners kicked in $750 million every year, and Hulu put all of that to work buying new stuff for the site, it could find itself outgunned.
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Hulu’s New Plan: Compete with Netflix and Amazon. How is Hulu Going to Pay for That?