News Corp. COO: Hulu to Expand Dual Revenue Model

8 May, 2013 By: Erik Gruenwedel

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Expect to see Hulu significantly broaden its ad-supported and subscription video-on-demand platforms in the next three years, News Corp. COO Chase Carey told analysts in a fiscal call.

Speaking May 8, Carey said the online content aggregator co-owned by The Walt Disney Co., News Corp. and Comcast, remains a work in progress, albeit with “great momentum.”

He said News Corp. is particularly excited about Hulu Plus, which reported 4 million subs in the first quarter, which generate nearly $32 million monthly in fees, excluding advertising.

“We think those dual revenue business models are ones that are really the heart of creating successful entities,” Carey said. “There’s a role for [ad-supported] Hulu in that market place. But I think the definition what goes into that product is something we are continuing to evaluate and discuss with our partners.”

He made no mention of media reports suggesting Hulu is entertaining third party acquisition bids, including a $500 million offer from Carey’s predecessor, Peter Chernin, and an investment group.

Carey believes the digital streaming market will continue to grow and ebb and flow. He said Hulu is a leading franchise in the space, which he believes will look quite a bit different in a few years.

The executive said as Netflix evolves its business with original programming and more selective licensing, Hulu needs to act on its leadership position in the streaming market, with it partners reacting accordingly, including focusing on dual revenue streams.

He said Hulu should facilitate access to new content, including original programming, to help build up the SVOD market, its bottom line and add dimensions to its existing businesses.

“I think that is something we need to decide with our partners,” Carey said.

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