By the end of 2018, Hulu will have added more subscribers in the second half of the year than it did in the first, CEO Randy Freer said in an appearance Tuesday at Business Insider’s Ignition conference.
That pace of growth would put it somewhere in the range of 24 million subscribers as 2019 begins. In recent years, Hulu has announced its subscriber tally at CES in early January. As of last year’s convention, it stood at 17 million, and the company reported 20 million in May at its NewFronts presentation.
“We need to get to 30, 40, 50 million homes,” Freer said. In order to get there, Hulu is rolling out customer-acquisition initiatives like a recent offer of 12 months of service for 99 cents a month, which proved “far more successful than we anticipated,” he said.
In bringing Freer to the stage of the New York event, moderator Nathan McAlone briefly alluded to the milestone approaching with Disney gaining majority control of Hulu due to the pending Fox acquisition. But he did not ask Freer about the merger’s effects on the 11-year-old streaming service during the 15-minute session. Instead, the main topic was the role Hulu plays in the current media landscape, regardless of who runs it.
“Hulu has really become an aggregator,” Freer said, noting the streaming giant’s 75,000 episodes of library content and progress in adding subscribers to its live TV offering as the pay-TV bundle continues to be rearranged.
While the news has been downbeat lately about skinny bundles, with DirecTV Now and Sling reporting disappointing results in the third quarter, Freer described the marketplace as “robust.”
At the same time, he added, “we all have to ultimately run a business that can be profitable.” Hulu is making progress on that front, he said, with 50% improvement in margins compared with when it launched in the spring of 2017. Along with its more than 20 million on-demand subscribers, it has more than 1 million paying for its live TV bundle.
One major complication on the bundle front, Freer said, is the traditional negotiating dynamic of “most-favored nation” terms that put all parties on equal footing. “It’s crazy that we’re still held hostage by the pay-TV industry and the MFNs,” he said. “It creates this place where you’re negotiating with the entire industry,” making it “really hard to innovate” in dealmaking.
International expansion remains a “question mark” for Hulu, as Freer put it. While Netflix has waged a hugely expensive campaign to span the globe, Hulu has largely stuck to its U.S. knitting. “We’re a little late in some markets,” Freer said. “Some markets are complicated. It’s a hard problem to solve from an investment standpoint. But we’re excited about some countries.”