Hulu came onto the scene in the mid 2000s as a free service and shocked the world.
“Free streaming television for anyone?”
Of course that turned out to be relatively short-lived and Hulu went through several strategy and monetization changes as viewers were shown a variety of pricing and advertising structures. It’s not like theyre going to cut a deal for live streaming of NFL games any time soon, right? Or are they……?
Now we have arrived at some level of stability, especially as Hulu Plus continues to grow a much larger following, competing with Amazon Prime and Netflix.
The standard and most desired model for Hulu’s business objectives has been to see more and more regular viewers convert to a paid subscription in order to increase guaranteed monthly revenue. Whether or not you use the service with some level of frequency, paying a monthly fee has shown to increase viewership, which leads into the second point.
Hulu and Hulu Plus makes a lot of money off advertising, unlike commercial free options like HBO now. People with paid accounts tend to use a service more frequently, resulting in a general increase in ad revenue. While Hulu Plus subscribers are typically shown fewer ads, it is still more profitable for Hulu to have more monthly subscribers.
Normaly Hulu users make money for the company by viewing more ads while they stream their favorite shows. Ultimately though, Hulu Plus provides more frequently updated content to attempt to get you to pay a premium.