Yesterday, Disney announced that it expects Hulu to lose $1.5 billion in 2019. The good news is Disney expects Hulu losses to stop and the service to be profitable in 2023 or 2024.
So, why is Hulu losing $1.5 billion? Disney did not go into it, but recently Hulu has been spending big to get new subscribers. Hulu offered a full year of Hulu’s on-demand limited-commercial plan for $0.99 last Black Friday, and they still have to pay content owners for the subscribers they have even if that subscriber is not paying full price.
Hulu has also been spending big to expand its content library—from new original shows to deals to bring more content to Hulu. This all costs up front and is something that Hulu hopes they will bring in future monies.
Disney did say during its presentation that they expect to keep content from their current partners on Hulu. They plan to use talent from Disney to grow Hulu.
Disney also said that they expect streaming to be making $50 billion a year from ads by 2022. This comes as Hulu recently cut the price of their ad-supported service to $5.99. Disney once again announced that Hulu now has 25 million subscribers. (2 million of that 25 million subscribers are customers currently on trials.) Hulu also saw a 20% jump in average hours per subscriber
Ad revenue seems to be a big part of Disney’s plans for the future of Hulu.
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