Hulu dropped deeper into the red last year as it boosted spending on originals and launched its live TV service — and the losses are expected to mount in 2018, as it continues to invest in content to fuel growth.
In 2017, Hulu lost $920 million, versus a loss of $531 million a year earlier. Its four owners — Comcast, 21st Century Fox, Disney and Time Warner — invested $1 billion in the streamer (versus $733 million in 2016, including $583 million from Time Warner).
The figures are based on Comcast’s 10-K disclosures, which said it invested $300 million in Hulu last year and recorded a $276 million share of losses. Comcast, Fox and Disney owns 30% of Hulu, and Time Warner holds 10%.
Hulu previously disclosed that it expected to spend around $2.5 billion on content in 2017.
According to estimates by BTIG Research analyst Rich Greenfield based on the owners’ financial disclosures, Hulu’s losses will climb 80% in calendar year 2018 to around $1.7 billion and the four parent companies will invest an additional $1.5 billion in the venture.
Investors in Disney and 21st Century Fox should demand more disclosure about Hulu’s financials, Greenfield says. That’s particularly relevant since Disney will acquire 21CF’s 30% stake in Hulu under the mammoth pact the media conglomerates announced late last year.
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“When Hulu’s losses and parent-company investment were relatively small, its ability to skew financials at its parent companies was modest,” Greenfield wrote in a blog post. But despite the growing losses “we have virtually no disclosure on the positive impact Hulu’s spending is having on its parent companies.”
Hulu said that as of the end of 2017, it had more than 17 million subscribers for its subscription on-demand and live TV packages, which are available only in the U.S. That was up 40% over the course of a year and half. But it didn’t disclose how many of those had the $40-per-month live TV service (which includes access to the SVOD library).