Hulu 2018 performance soars driven by big content spend, losses grow too

According to the latest data from Hulu, the company continues to grow at a spectacular pace. Hulu grew subscribers to 25 million in 2018, an increase of 8M from the previous year. As well, advertising revenue increased 45%, to reach $1.5 billion.

Such growth does not come cheap. Estimates put Hulu’s losses at around $1.5 billion in 2018. As well, the company spent $2.5 billion on content in 2017, and likely more than that in 2018. However, though the company is spending a lot, it appears to be spending it wisely.

More content driving Hulu’s growth in every dimension

Hulu boosted its on-demand library to 85,000 episodes, including exclusive rights to every episode of shows such as ERLostKing of the HillFamily Guy, and Bob’s Burgers. It also delivered marque originals including season 2 of The Handmaid’s Tale and the very successful Castle Rock.

The boost in content available through Hulu is also driving increased usage by subscribers. The company says the average time each month spent on Hulu per subscriber increased 20% during 2018. A lot of that time is spent binge watching. Hulu reports that over half of viewing sessions of the top 100 shows were of three or more episodes back-to-back.

Moreover, on-demand viewing appears to be Hulu’s sweet spot. Hulu Live subscribers, who have access to live TV channels and the on-demand catalog, spend half their viewing time watching on-demand. Nielsen says the average adult in Q2 2018 watched 3 hours and 59 minutes of live TV per day and only 32 minutes of time-shifted TV.

Breaking down Hulu’s subscriber base, it’s clear why the company is investing so much in on-demand content.

Subscription revenue remains king at Hulu in 2018

Hulu’s subscriber’s breakdown into three primary groups:

  • Regular subscribers to Hulu’s basic $7.99 a month on-demand video service
  • On-demand subscribers that have upgraded to ad-free service for an addition $4 a month
  • Customers of Hulu’s virtual MVPD service ‘Live’ paying a minimum of $39.99.

As a private company, Hulu does not regularly report on its performance. However, it does provide irregular guidance on progress. In May of 2018, Hulu said it had reached 20 million subscribers, an increase of 3M from the end of 2017. The latest news from the company says it now has 25 million total subscribers, an increase of 8 million from 2017.

Hulu subs splits between live, basic, and ad-free

The company has never been specific about the number of ad-free subscribers it has. Last year, company insiders said the “vast majority” of people that sign-up watch ads. They have also said it’s about 50-50, between ad-free and ad-watching subscriber.  I have estimated the population of ad-free viewers in 2018 at 28%.

Hulu Live launched mid-2017. Just over a year later, in September 2018, the company confirmed that Live had the 1 million subscriber milestone, a gain of 200,000 subscribers over April 2018. Given that the fourth quarter has been strong for Netflix and other providers, Hulu Live likely finished the year with around 1.2 million subscribers.

Hulu revenue split between subs and ads

This data allows nScreenMedia to estimate Hulu earned $2.7 billion in subscriber revenue in 2018. Total revenue was approximately $4.2 billion, up over 50% from 2017.  36% of revenue comes from ads and 54% from on-demand subscribers. Hulu Live is responsible for just 10% of total revenue. The revenue picture helps explain Hulu’s intense focus on on-demand viewing.

Disney plans further growth

Assuming Disney’s purchase of Fox assets closes as expected this year, it will assume a controlling interest in Hulu. When that happens, Disney CEO Bob Iger plans to continue heavy investment in the service and may push to accelerate it.

read more here: www.nscreenmedia.com

Subscription OTT Market to Grow 24% in 2018

Nearly 765 million people worldwide will use a subscription over-the-top (OTT) video service at least once per month this year, according to the latest forecast from eMarketer. This total will represent 10.2 percent of the global population and 32.1 percent of digital video viewers worldwide.

The firm expects the global subscription OTT market will grow by 24.0 percent thanks to increasing internet penetration, faster speeds and a broader shift toward online entertainment. The shift is fueled in part by streaming giants like Amazon and Netflix increasing their content spend outside the country in an effort to boost international membership. Netflix alone added 4.47 million subscribers internationally in Q2 of this year. The streaming giant has remarkable user penetration rate in countries including Norway (62 percent), Canada (56.3 percent), Denmark (54.9 percent), and Sweden (50.2 percent).

All around the world consumers are turning to OTT services as a cheaper alternative to traditional pay TV subscriptions. In the UK, for example, new data from media regulator Ofcom (per Variety) shows SVOD subscritions outnumbering those to traditional pay-TV for the first time.

read more here: thevideoink.com

Digital transition drives growth in European cable

The cable industry is growing, with total revenues up 4.6% year on year based on IHS statistics released today by the industry’s trade association, Cable Europe, at the annual Cable Congress in Brussels.

Revenue growth remains solid across all cable services: broadband internet (7.5%), TV (3.7%) and telephony (2.1%). Broadband represents an increasing share of revenue at 32.8%, and the number of broadband subscribers rose 5.9%. Television continues to be the largest source of profit for the industry, accounting for 46.5% of the €23.45 billion of revenue.

The digital transition continues to be an important driver for TV services, with revenue growth for TV driven by a strong appetite for digital subscriptions and video on demand (VOD). Digital TV subscribers rose 6.3%, accounting for 66.3% of all TV subscriptions and generating 80% of TV revenue.

More than 2.7 million Revenue Generating Units (RGUs), the industry metric for the total sum of TV, internet and telephony subscriptions, were added in 2016, and the total across Europe is now 118.24 million.

Manuel Kohnstamm, President of Cable Europe, commented: “Overall digital VOD revenue has increased by 14.1% year on year, showing solid growth in the year. Going forward, we still see huge opportunities for sustained digital growth in Europe, as 18.5 million analogue TV subscribers are still to convert.”

read more here:

http://www.digitaltvnews.net/?p=28823

Connected TV growth slows in the US

Growth in connected TV sales is slowing in the US, as penetration reaches into most households, according to research from The Diffusion Group (TDG).

The study shows that penetration of Internet-connected TVs among US broadband households has increased nearly 50% since 2013, from 50% to 74% at year-end 2016. And that means that sales are slowing.

Growth between 2015 and last year was only 4%, compared to 22% between 2013 and 2014, and another 15% between 2014 and 2015.

Besides saturation, broadband penetration has a hand in this. As TDG first noted in 2004, the diffusion of connected TVs would closely follow broadband uptake, and as broadband growth begins to slow, so too does the number of new connected-TV users.

Read more here:
http://www.rapidtvnews.com/2017012745933/connected-tv-growth-slows-in-the-us.html#axzz4Wxx9UMqE