How Hulu Works

When it comes to video on demand, premium over-the-top media service, or internet-based TV streaming service, Hulu is the name of the game. Almost 80% of VOD content viewers use for its innumerable content. Users can watch nearly all popular TV channels live, TV shows, documentaries, latest movies, or other video content.

Established in 2007 and launched services in 2008, Hulu has grown to become one of the biggest competitors of Netflix and Amazon Video. Hulu was a well-planned idea of top leaders from the entertainment industry.

Did you know Hulu is operational in the USA and Japan only while Netflix is operational worldwide in almost 190 countries?

What surprises the new-age startups is that Netflix and Amazon Prime Video started with a concept to disrupt the traditional way of consuming content and Hulu grew enormously by preserving the traditional way of consuming contents. That means, Netflix with its on-demand video streaming app, forced users to cut the cords of cable and switch to ad-free content; Hulu started differently —with TV shows. Yet, it is profitably growing while Netflix is reported to be at a loss.

So, the question, “what keeps Hulu profitable?”

To understand this question, you need to explore “how does Hulu work?” Before I explore this question, let’s take popularity metrics to top OTT platforms in the USA.

Hulu Popularity at Glance

Number of OTT Video Viewers in the United States from 2018 to 2024 by ProvidersAccording to Statista, Hulu is the third largest subscription video-on-demand service provider to reach 94.5 million viewers in 2020 while expected to achieve 99.7 million in 2021? Let’s take a look at the survey report here;

One of the top reasons for Hulu’s rising popularity could be that it offers flexible subscription plans, including free trials for a month. As far paid subscribers are concerned, it has around 40 million as of Q1 2021.

The data given here suggest that Hulu is growing steadily and expected to maintain its growth speed in the future. So, what is keeping it profitable? The simple answer to his question is Hulu’s business model and its working method.

The Strategic Reasons for Hulu’s Rapid Growth

Hulu’s growth has taken many by surprise —thanks to its unique strategies pre-defined business model. When the entire OTT platforms forced users to get rid of traditional ways of consuming content and traditional TV channels, Hulu reincarnated and provided people with their favorite TV shows.

Its relation with all the top TV channels, such as NBC, ABC, Fox, CNBC, National Geographic, Disney, and more, are the driving force.

Did you know initially, Hulu used to offer both free as well as a paid subscription that supported Hulu grabbing mass attention?

In 2010, Hulu Plus was launched that offered a comprehensive content library that included full seasons of TV episodes, usually “day-after-access” to content streamed on TV channels. In 2017, it became a live TV streaming service and also started creating its own unique content.

How does Hulu work?

Let’s come to our core question, “how does Hulu work?” I will decode the question in the following paragraphs.

User Registration: Users need to register themselves with the site to access the VOD contents. If users choses a free plan, they get PC-only access, while for multiple device access, users need to choose a paid subscription. With registration, a one-month free subscription is given.

How Much Does Hulu Cost?

The basic services of Hulu start at $5.99/month for the first year. However, users need to subscribe to a premium subscription (SVoD only) at $11.99/month if users want to access ad-free content.

Besides, if users choses to subscribe to SVoD + Live TV, they need to pay $54.99/month with ads and $64.99/month without ads.

Price Per MonthScreensSubscription Package
$5.991Basic Hulu On Demand (ads-supported)
$11.991Premium Hulu On Demand (no-ads)
$54.992SVoD + Live TV with ads
$64.992Premium SVoD + Live TV without ads

Apart from these, users can buy add-ons for extra costs. Let’s take a look at it.

Add-ons provided by Hulu

Price Per MonthAdd-on
$9.99(200hr) Hulu Live TV with Enhanced DVR
$9.99Hulu Live TV with Unlimited Streams
$14.99Hulu Live TV with Unlimited Streams + Enhanced DVR
$10.99To Access SHOWTIME®
$14.99To Access HBO® on Hulu
$9.99To Access Cinemax® on Hulu
$8.99To Access STARZ® on Hulu
$7.99To Access Entertainment + Lifestyle Contents

What Makes It a Great Inspiration for Entrepreneurs

Even though Hulu is not a startup nor backed by any inspiring story, there are plenty of things to learn and get inspired from Hulu’s success. Let’s explore some of the inspiring things that entrepreneurs can follow to succeed in their business endeavors.

Business Success Lies Behind Smart Mind

Of course, the type of business you choose to establish matters to achieve success, but more than that, it is the mind behind the business that matters the most. As I mentioned earlier, Hulu is not backed by inspiring stories; it is born out of well-thought ideas of top Hollywood executives. They saw the potentials, sensed the market gap, felt the pain points of consumers, and filled the gap at the right time.

Success doesn’t Come to Those who Wait for It

Success is never awarded to the person who waits for it. Instead, you need to achieve it by working tirelessly. Hulu is the live example of it. It has gone through many ups and downs during its initial stage. At times when Hulu stocks plummeted significantly, but it was their strategic effort that led it to bring down all obstacles and snatched success.

Add Value, It Sells

Hulu has gone through transformational changes while maintaining its legacy. There is only one way to add value to your services and products to stay in touch with consumers —end users. The fate of a business depends on how much you know your customers. Stay connected with your customers, get their feedback, and try to solve their problems. That’s how you can add value to your products and services. Hulu did it successfully.

Disruption doesn’t Always Mean Success

Disruption is business (for something new to happen) is good, but it can turn upside down anytime. When Netflix launched, everybody started talking about VOD content and getting rid of traditional cable TV. In fact, Netflix termed it as old school, but Hulu sensed the gap, and it knew that cable TV is still far from what it is being claimed. Besides, the Hulu team knew that disruption is never an easy affair.

Focus on Revenue

Revenue is another name of success. Initially, Hulu focused on getting mass attention with freebies, but its entire focus was on getting revenue once it achieved initial success. But, it kept customers at the center-stage. You can see Hulu still offers free trials, but it earns through ads with those subscribing to its ad-supported contents or free plan. Besides ads, it earns through TV channels and add-ons. Consumers need to buy add-ons for extra costs if they like to watch additional content on Hulu.

Think About Expansion

Business is about expansion. You cannot keep the same strategies for an extended period of time. You need to bring changes to them. Similarly, success is a never-ending process. It’s like a milestone that you need to keep achieving. You need to expand your business to achieve remarkable results. Hulu was accessible across the USA only; now, it is available in Japan also. It is also considering bringing Hulu as a global OTT platform. That’s the way we keep growing and achieve new success.

Final Thoughts

Hulu is no doubt a successful effort put by its owner. So, if you plan to start something similar, you need to go through Hulu’s business model, how it works and what steps it is taking to grab the future trends. You can take the help of experts to understand your business prospects better.

Author Bio: Chris is the Writer and Journalist. He loves to deep dive into the ins and outs of the technologies. His aim is to share the knowledge by writing on the technicals about Business, eCommerce, Startup, Enterprise IoT, AR, VR, and other Smart Technologies. To describe him in one word, he is a writer focused on Tomorrow’s World.