Hulu, a well-known player in the streaming industry, has revolutionized our way of consuming entertainment content. Hulu has become a significant competitor to other streaming services such as Disney+ and Netflix thanks to its vast library of movies, TV shows, and original programming. In this blog, we will discuss the various approaches to investing in Hulu stock and explore alternative investment opportunities within the streaming industry.
An overview of Hulu:
Hulu is a popular American streaming service that provides a vast collection of on-demand and live content. It was established in 2007 as a joint venture between two of the biggest media companies in the world: Disney and Comcast. Disney owns 67% of Hulu, while Comcast owns 33%. As of 2023, Hulu has over 48.2 million subscribers. Hulu offers a tiered subscription model that caters to different viewers. It provides both ad-supported and ad-free options. Furthermore, Hulu also offers live TV add-ons, which enable subscribers to enjoy popular cable channels alongside their on-demand content.
How Can I Buy Hulu Stock?
Hulu is not publicly traded and therefore not listed on major stock exchanges like the New York Stock Exchange or NASDAQ. However, you can still benefit from Hulu’s success by investing in its parent companies: Disney and Comcast. These two companies are global leaders in media and entertainment and hold a majority stake in Hulu. By investing in Disney or Comcast, you can indirectly own a part of Hulu and benefit from its growth potential.
Indirect Approach to Invest in Hulu:
While direct investment in Hulu may be challenging, there are alternative ways to gain exposure to Hulu’s potential success in the streaming industry. One option is to invest in exchange-traded funds (ETFs) or mutual funds that include Hulu as part of their holdings. These investment vehicles allow you to gain indirect exposure to Hulu’s performance along with a diversified portfolio of other companies within the streaming industry.
Another indirect approach is to invest in companies that have a stake in Hulu. For instance: Disney and Comcast. Let’s get into these two companies.
1. Disney:
Disney (DIS: NYE) is a global entertainment company with subsidiaries and affiliates including Disney theme parks and resorts, Pixar, Marvel, Disney+, and ESPN. According to Disney’s earnings report for the fiscal year ending December 31, 2022, total revenues increased by 8%, and net income increased by 5%, amounting to $1,773,000.00.
2. Comcast:
Comcast Corporation (CMCSA: NSD) is one of the largest video, high-speed internet, and phone providers in the United States. Comcast Cable also offers security and automation services to residential customers. The company’s revenue fell by 4.3% in the first quarter of 2023, compared to the same quarter last year. This was largely because of the expenses of broadcasting the Beijing Olympics and the Super Bowl for the NFL. However, the net income attributable to Comcast went up by 8.0% in the first quarter of 2023.
How Does Hulu Make Money?
Understanding how Hulu generates revenue is essential when considering investing in the streaming industry. Hulu primarily earns revenue through a combination of subscriptions, advertising, and partnerships. Let’s dive into Hulu’s financial model.
1. Subscriptions:
This is Hulu’s primary source of income, accounting for 54% of its total revenue in 2023. With over 48 million subscribers, Hulu offers tiered plans to cater to diverse preferences. Whether you’re a movie buff opting for the SVOD plan at $7.99/month or a sports fan subscribing to Hulu with Live TV for $69.99/month, your contribution adds up to a significant chunk of Hulu’s financial pie.
2. Advertising:
If you prefer the ad-supported plans, you’re contributing to another major revenue stream for Hulu. In 2019 alone, Hulu raked in an impressive $1.9 billion from targeted ads strategically placed throughout your favorite shows. While these ads might interrupt your viewing experience, they play a crucial role in keeping subscription costs lower for many users.
3. Partnerships:
Collaborating with giants like Disney proves to be a win-win situation for both parties. Their bundled subscription offering access to both Hulu and Disney+ for $13.99/month entices users and drives revenue for both platforms. Additionally, partnerships with companies like Comcast contribute to platform development and expansion, ensuring a wider reach and more content for viewers.
How to Invest in Alternatives to Hulu Stock:
Hulu offers a unique investment opportunity, it’s worth exploring other streaming platforms that are publicly traded. Companies such as Netflix and Disney have become leaders in the streaming industry, capturing significant market share and demonstrating promising growth prospects. Investing in these companies could provide exposure to the overall growth of the streaming industry. Let’s dive into the competitors of Hulu.
1. Netflix:
Netflix (NFLX: NSD) is another prominent player in the streaming industry. It is a subscription-based streaming service that allows members to watch TV shows and movies on an internet-connected device. Netflix is currently valued at $197.83 billion. Now is considered an ideal time for those looking to invest in Netflix stocks, as the company’s share price has stabilized and shows signs of growth.
2. Amazon Prime Video:
Amazon Prime Video (AMZN: NSD) is also a popular streaming service. The company has shown improvement in its financial performance, with a net income of $3.2 billion in the first quarter of 2023 compared to a net loss of $3.8 billion in the previous year. Amazon’s net sales also increased by 9% to $127.4 billion. The company generates revenue from various sources, including Prime content, physical stores, AWS services, and others.
3. Apple TV+:
Apple TV+ (AAPL: NSD) is Apple’s offering in the streaming market, featuring original content, movies, and TV shows. Apple has shown improved business performance with a steady operating cash flow of $28.6 billion in its second quarter of 2023. Despite a 3% decrease in total revenue, Apple CEO Tim Cook reported an all-time record in services and the company’s commitment to long-term investment.
Analyzing the Risks and Rewards of Investing in Hulu:
Investing in any stock involves analyzing the potential risks and rewards. The streaming industry is competitive, and Hulu faces challenges such as increasing competition, rapid technological advancements, and potential regulatory changes. These factors may impact the company’s performance and potential returns for investors.
On the other hand, Hulu’s position in the market, its expanding subscriber base, and its ability to create compelling original content offer potential rewards for investors. As the streaming industry continues to grow, Hulu’s long-term growth prospects remain favorable.
Conclusion:
Hulu is a leading streaming service, but it is not publicly traded. Invest in Hulu’s parent companies: Disney and Comcast or consider alternatives like Netflix and Disney to benefit from the streaming industry’s growth.
FAQs
1. How can I invest in Hulu?
To invest in Hulu, you can buy stock of Disney or Comcast, as they own a majority stake in Hulu.
2. Who owns Hulu?
Hulu is jointly owned by Disney and Comcast. Disney owns 67% of Hulu, while Comcast owns 33% of the company.
3. Can I buy Disney stock to invest in Hulu?
Yes, buying shares of Disney is an indirect way to invest in Hulu. Disney owns a majority stake in Hulu, so by investing in Disney stock, you are essentially gaining exposure to Hulu’s potential growth.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
