“I never faulted anyone for assuming we were dead on arrival,” said Hulu CEO Jason Kilar at today’s NewTeeVee conference in San Francisco. “I understand that that was a fair opinion to have.”
But not anymore.
The online streaming service is flourishing: Hulu is projecting revenues of $240 million in 2010, more than double the company’s $108 million earnings last year. What’s more, the service now boasts more than 30 million monthly users, but Kilar would only say the number of Hulu Plus subscribers–paying its $9.99 monthly fee–is “ahead of plan.” (He did mention that industry wide, 41 cents of every dollar earned on premium content is from advertising, while 30 cents is from subscriptions.)
Kilar also explained what the company’s next steps are and why Hulu Plus has ads.
“Our ambition is to be on any internet connected device on the planet,” he said. “We could certainly be on any internet connected device tomorrow if we wanted to.”
But first, Hulu wants to perfect its content and advertising model. Kilar said ads on Hulu are 55% more effective than ads on traditional channels, a major selling point for Hulu’s viability. It’s one of the reasons Hulu Plus still features ads.
“There’s nothing that’s preventing us from offering an ad-free version–it’s just economics,” he explained. According to Kilar, Hulu asked some 5,000 people whether they’d prefer to have an ad-free version of Hulu Plus at a higher price, or an ad-supported service at a lower monthly fee–exactly the question we put to Fast Company readers yesterday. Predictably, a “huge percentage” of consumers were willing to watch a few ads in exchange for a lower subscription price.
Kilar also hinted at an underlying alliance against traditional television between Hulu and Netflix, which many see as soon-to-be competitors.
“Hulu, Hulu Plus, and Netflix,” he said, “have all been consioculy designed to be different and not a substitute for pay TV services in the living room.”
See more of Jason Kilar at Innovation Uncensored 2011.