Hulu surpasses 1.5 million subscribers
The Santa Monica-based Internet company also notched $420 million in revenue for the year, an increase of 60% over 2010. That was slightly less than initial projections. Early on, Hulu predicted that it would approach $500 million in revenue for the year. However, the advertising market slowed during the third and fourth quarters, putting a crunch on the company's ambitious estimates.
"We exceeded our plan despite the soft advertising market (economy) in the second half of 2011," Hulu chief executive Jason Kilar wrote Thursday in a blog post. "Overall the Hulu ad business grew aggressively and Hulu Plus materially exceeded our plan."
Hulu — a joint venture of media giants Walt Disney Co., News Corp. and NBCUniversal and private firm Providence Equity Partners — does not break out its earnings. A Hulu spokesperson said the service has become profitable in the U.S.
However, the company ramped up spending in 2011 to start a service in Japan, which likely was a drag on earnings.
This year should be healthier for Hulu and other media companies because of the rebounding ad market. What's more, Hulu has been concentrating on building its subscription service, Hulu Plus. The original Hulu online video site is still a free offering. Hulu Plus, launched in November 2010 is a more exclusive and expansive offering that costs consumers $7.99 a month.
"We expect our subscription services to account for more than half of Hulu’s overall business later this year," Kilar wrote in the post.
Hulu said it was spending about $500 million for programming in 2012. It recently announced a Hulu Latino service with Spanish-language programming as well as locking up online syndication rights for the quirky sitcom "Community."
"Hulu’s content offering grew approximately 40% versus 2010; Hulu Plus’ content offering grew more than 105%," Kilar wrote.
— Meg James
Photos: Top Center: Alec Baldwin stars in Hulu's inaugural television advertisement in 2009, calling Hulu "an evil plot to destroy the world." Credit: Hulu. Bottom right: Hulu Chief Executive Jason Kilar at the company's West LA offices; Credit: Gary Friedman / Los Angeles Times.