Hulu may be the No. 3 streaming service in the world–following Netflix and Amazon–but that doesn’t make it profitable. As Disney and Comcast duke it out over control of 21st Century Fox, which owns a majority stake in Hulu, the question arises: What will they do with the company? According to The Information (paywalled), despite Hulu’s success in acquiring new customers, it is bleeding money. In fact, losses hit $436 million in Q1 alone. Compare that to last year, when the company lost a total of $920 million over all four quarters. Which is to say, Hulu is ramping up its spending and investments, and therefore losses.
As Fast Company‘s Nicole LaPorte wrote last week, Hulu plays a very important role in Comcast’s and Disney’s fight over 21st Century Fox. The two rival companies would have very different strategies with the service–but they are likely also hyperaware of the investments being made in an effort to grow Hulu. All this said, investors are still in it for the long haul with Hulu; Disney’s chief strategy officer, Kevin Mayer, said earlier this year that Hulu will become a profitable service in the future.
Hulu, however, still trails its competitors in size, so it will likely have to spend even more money to try and close that gap. (Hulu recently passed 20 million subscribers in the United States. By comparison, Netflix has more than 56 million domestic subscribers and 125 million globally.) As The Information points out, Hulu’s cash burn is half of Netflix’s, yet it hasn’t been able to scale at the same rate. Hulu is still U.S.-based, and Netflix has expanded globally.
Meanwhile, the Justice Department’s antitrust case against AT&T’s attempt to acquire Time Warner will surely impact 21st Century Fox bids. And from there we’ll get a better sense for what lies ahead for Hulu, and what strategy its future majority stakeholders have.
A Hulu spokesperson said the company doesn’t comment on internal financial matters.