Earlier this month, Hulu revealed that they now have 26.8 million paid subscribers (28 million total), up from 23 million they announced at the end of the year. According to Peter Naylor, Hulu’s SVP of Advertising, the total audience is closer to 82 million, signaling there are just under 3 users per Hulu account. While there was no limit of number of users that could stream from a signal Hulu account, they recently upped the limit so two devices could stream simultaneously.
Naylor also shared that 70% of those users stream as part of the Hulu Limited Commercials ($5.99) plan. This is higher than the 60% that “come on board for the ads service”, which Hulu CEO Randy Freer shared in an interview last month.
Hulu CEO Freer has said that this is despite the fact that ads used to be one of the top three complaints of the service. Hulu has tried to improve the product for those on the Limited Commercials tier ($5.99), by limiting ad pods to just 90 seconds, and setting frequency levels on an hourly and daily basis. Freer thinks that with these changes they will have the “best customer experience for ads, at a price that will ultimately people will be ok with.”
At the end of the year, Hulu disclosed that they generated $1.5 billion in ad revenue in 2018 — which would mean $7-8 per Hulu w/ Ads account.
The company has never promoted the ad-free product ($11.99), because they “needed the economics associated with a dual revenue stream in subscription and ad revenue,” according to Freer. But, they expect that to change this year, now they feel they can grow even faster by promoting the ad-free product to customers who truly don’t want ads.
The company, which lost over $1 billion this past year, expects that 2019 will be the apex of losses. Earlier this month, Disney announced that they had reached a deal with Comcast to take full control of the streaming service — by agreeing to buy their stake at a $27 billion valuation in 2023. Just last month, AT&T sold their 9.5% stake in Hulu back to the company at a $15 billion valuation.