Hulu’s new live TV service is poised for profitability through its blend of channel packaging, premium VOD and advanced ad capabilities, Hulu CEO Mike Hopkins said today on CNBC.
Hopkins said Hulu will make money on the new product when pressed on whether it can with a package that starts at about $40 per month for a lineup featuring 50-plus channels plus a baseline cloud DVR offering.
“Yeah, we can [make money],” Hopkins said. “When you put all that together, I think we’ve got something very powerful, economically, as well.”
He said the numbers will add up as Hulu combines SVOD, a largely fixed-cost business, with the variable costs of a live TV lineup, and the infusion of Hulu’s “powerful advertising platform.”
He said that economic position also improves with feature upgrades that include an enhanced cloud DVR service and an option for unlimited in-home program streams.
Hopkins was also hopeful that Hulu Live TV, which will tangle with the likes of Sling TV, fuboTV, YouTube TV, PlayStation Vue and DirecTV Now, will differentiate in the market with a package that bakes in the premium SVOD catalog of about 3,500 TV titles and films and a new user experience that “is cinematic, personalized and elegant.”
He likewise believes that Hulu is positioned to bring consumers back into the pay TV fold, something that has become a challenge for all MVPDs as the cord-cutting trend becomes more prominent.
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“We can actually get people who have opted out of the system back in through a service like Hulu Live TV,” he said.
Though Hulu has added live TV to its mix, Hopkins stressed that the company remains “absolutely committed” to SVOD.
“It’s really the lifeblood of our company,” he said. “But we’re also extremely excited to enter this new, emerging over-the-top pay TV space as well.”
Hopkins was also asked why Hulu didn’t give a new sub count for its VOD product at this week’s Upfront presentation.
He said Hulu uses that event to speak to advertisers, so the sub number isn’t perfectly relevant to them.
“Subscribers just aren’t the way to measure us when almost half of our revenues is advertising,” he said, while adding that SVOD counts are up double digits. Hulu announced a year ago that it was approaching 12 million SVOD customers, up more than 30% from the year before.
Advertisers, he said, are more keyed on viewers, adding that Hulu now has 47 million unique viewers, with 33 million of them getting advertising.
Hopkins also doesn’t see a pressing need for Hulu to expand internationally in the way that SVOD rivals such as Netflix and Amazon have.
He said Hulu’s U.S. focus has helped in some ways because producers of TV shows tend to want more control of their international distribution. At the same time, he said the world should not be surprised if Hulu does launch in more territories in the next couple of years.