Hulu is a go-to service for online TV. The company operates an ad-supported website Hulu.com that allows viewers to watch online video content -- TV shows, clips, and movies -- for free. Its premium service Hulu Plus allows streaming of full current and past season content on everything from TV sets and PCs to mobile phones and tablets for a monthly subscription fee. Hulu's programming is provided by more than 400 content companies, including network TV providers ABC, FOX, and NBC, as well as film studios MGM, Paramount, and Sony. Those that have advertised on Hulu since its launch in 2008 include McDonald's, Microsoft, Target, and Toyota.
Hula has double its number of subscribers in recent years. The company now has 4 million paying subscribers.
Users can choose from more than thousands of current prime time TV shows, movies, and documentaries. While the site is primarily ad-supported, the company also has revenue-sharing arrangements with partner sites such as AOL, MSN, and Yahoo!, to which Hulu distributes content. The agreements helped the company diversify its revenue stream.
Hulu’s sales jumped more than 65% to $695 million in fiscal 2012, driven by advertising and subscriptions.
Hulu started charging a fee for expanded access to content through its Hulu Plus service. Hulu Plus also distributes content to mobile devices, such as Apple's iPad and iPhone.
The company faces a challenging media landscape in which consumers have a growing amount of options on where and how to access content. Such challenges are leading Hulu's owners to consider alternative strategies for the video site. The company may change its business model to eschew re-runs in favor of offering live TV channels and video-on-demand content to subscribers, much like a traditional cable network. Another option involved a possible sale of Hulu, but those talks ended in 2011 when Hulu owners decided there was more value in keeping the company.
Hulu was launched in 2008 as a joint venture between NBCUniversal (NBCU, parent of NBC) and FOX parent News Corp. (now Twenty-First Century Fox). In 2009 Disney (parent of ABC) became a content partner and 30% shareholder. Disney joined the two other media firms and private equity firm Providence Equity Partners in the new ownership structure. Additionally, the 2011 mega-deal through which cable giant Comcast purchased a majority stake in NBCU from GE gave Comcast a 27% share in Hulu.
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