How Hulu Made $420 Million in Revenue in 2011

By 01/12/2012
How Hulu Made $420 Million in Revenue in 2011

Hulu CEO Jason Kilar recently announced on his company’s blog that the internet’s go-to destination for on-demand streaming of movies and television shows earned over $420 million in revenue in 2011. That’s a few million shy of Kilar’s original prediction from back in April 2011 that the company was on “pace to approach half a billion dollars” in revenue for the year, but still a 60% increase over 2010’s total of $263 million.

So, based on Kilar’s blog posts, Hulu earned somewhere in the ballpark of $157 million more in revenue in 2011 than it did in 2010. Where did that increase in revenue come from? Let’s take a look.

Hulu Plus

Tubefilter

Subscribe for daily Tubefilter Top Stories

Subscribe

Hulu ended the year with over 1.5 million paid Hulu Plus subscribers, a milestone the company says it reached “faster than any video subscription service” (online or offline) in US history. Hulu’s put together a nice graph that shows the company’s upward tick in its Hulu Plus subscriber base over the past five quarters.

We know a subscription to Hulu Plus costs $7.99 per month, which makes it relatively easy to conservatively estimate the quarterly revenue generated by the site’s premium pay product. Below is a chart with rough estimates, generously assuming 300,000 Hulu Plus subscribers for the three months of Q4 2010, 500,00 for each month of Q1 2011, 875,000 for Q2 2011, 1 million for Q3 2011, and 1.5 million for Q4 2011.

This estimates Hulu Plus generated roughly $7.19 million in revenue in 2010 and $92.88 million in revenue for all of 2011, making for a year-over-year revenue increase of $85.69 million for the product. Subtract that from Hulu’s year-over-year increase in total revenue ($157 million), and you’re still left with $71.31 million and change. So, where else could Hulu have increased its revenue in 2011?

Online Video Ads

If you take all the available comScore data for online video ads viewed on Hulu for 2010 (the anatlytics company first began tracking video ads in June 2010), the numbers average out to 975,936,000 video ads viewed per month. That makes for a yearly estimate of 11.711 billion video ads viewed. Do the same for 2011 and you get 1,145,444,000 monthly video ads viewed and a total of 13.745 billion video ads viewed for the year.

That makes for a difference of 2.034 billion video ads viewed year over year. Take those view counts and multiply them by a $35 CPM and we come away with $71.19 million. That number is surprisingly close to the $71.31 million of Hulu’s year-over-year increase in total revenue we have left over after factoring in the revenue generated by Hulu Plus.

I realize that this math is incredibly simplistic and I have no insight into the financial idiosyncrasies of a multi-billion dollar global entertainment, advertising, and technology company, but the end result seems not so bad for working with an iPhone calculator and publicly available analytics.

But, the big question is, what is Hulu going to do with those extra dollars? Well, it’s going to invest a lot of them in more content. Kilar writes he’s “excited to invest approximately half a billion in content in 2012 on behalf of our users.”

 

 

Subscribe for daily Tubefilter Top Stories

Stay up-to-date with the latest and breaking creator and online video news delivered right to your inbox.

Subscribe