Hulu Plans $500 Million Content Investment

LOS ANGELES: Hulu is planning to spend an additional $500 million on content this year, after ending 2011 with some $420 million in revenue.

Hulu CEO Jason Kilar revealed in a blog post that the company grew its business 60 percent from 2010 to 2011. "We exceeded our plan despite the soft advertising market (economy) in the second half of 2011," he said. "Overall the Hulu ad business grew aggressively and Hulu Plus materially exceeded our plan."

There are currently more than 1.5 million paying subscribers for Hulu Plus, and the company is "attracting more than 2x the number of subscribers each day when compared to this time last year," said Kilar. "We expect our subscription services to account for more than half of Hulu’s overall business later this year."

Last year marked a dramatic expansion in the content offerings for Hulu and Hulu Plus. Hulu grew its offerings by 40 percent compared to 2010, while Hulu Plus built its offerings by more than 105 percent.

"As you might expect, based on the 2011 results mentioned above and our recent launch of Hulu in Japan, we as a team are very bullish on where things go from here," Kilar continued. "We have conviction that digital ultimately becomes the primary way that consumers across the globe choose to access content. We have been focused on building a strong foundation that empowers the Hulu team to best serve customers (users, advertisers, and content owners). As just one example, our dual revenue stream Hulu Plus business model enables us to compensate content owners much more than anyone else in the online subscription market on a per subscriber basis. At scale, our model allows us to profitably pay content owners approximately 50-percent more in content licensing fees per subscriber when compared to other similarly priced online subscription services. We believe our approach will enable us to secure more valuable content for our users and to secure content in more attractive windows than would otherwise be possible. To that end, we are excited to invest approximately half a billion in content in 2012 on behalf of our users."