Is Hulu Stock Worth Investing In?
When streaming services started to emerge on the internet, it’s not surprising that several individuals signed up for paid subscriptions from companies offering the service. At the time, Hulu had a business model that allowed you to watch shows on their service for free. Without a subscription plan, Wall Street experts questioned the profitability of the business model and frowned on the possibility of supporting an IPO. However, times have changed. Now, Hulu looks like it’s in a better position to take advantage of individuals who want quick access to streaming entertainment. Read on to find if Hulu Stock Worth Investing in or not.
Choosing the Wrong Business Model
According to the experts at Money Morning, “Hulu brought in just $265 million in revenue” in 2010. This lackluster figure was primarily due to their decision not to use a paid subscription model. At the same time, there was talk of offering Hulu stock, but the company ended up staying private due to their lack of gaining significant revenues. This decision left them behind competitors, such as Netflix, that rolled out a paid subscription model early.
Hulu Makes a Significant Change
The top management at Hulu knew if they were going to make more profits, they better start charging for their service and offer a subscription model. Choosing a tiered subscription model put them in an excellent position to generate more revenue. Their subscription plans started at $7.99 per month and could go as high as $39.99 monthly. Fortunately, the change paid off and moved them from receiving millions of dollars from customers to around $2.4 billion in 2017. This remarkable surge in revenue growth has turned some heads and makes the company more attractive to investors. Changing their business model was extremely positive and put the company back on track towards offering Hulu stock.
Positive Outlook for Video Subscription Streaming Service Revenue Growth
While it can be an excellent experience to go to a movie in a theater, you can’t beat the convenience of using a streaming video subscription service at home. Several individuals in the United States feel this way, which is why it’s expected that revenue in this niche should continue to climb. This is good news for a private company like Hulu that is offering a popular streaming service in the space. It’s in a prime position to take advantage of this growth in revenue.
Is a Hulu Stock Worth Investing in if It’s Offered?
Thanks to the change in Hulu’s business model, it may provide a good opportunity for you to invest in an IPO if the company offers it. The future continues to look bright for companies in this industry. People want the convenience and ease of watching their favorite shows and movies in the comfort of their home or on a mobile device. Getting involved in an IPO of shares for the company may help give you substantial profits in the future if it’s ever offered. Until then, you’ll have to keep an eye on the company to see if this plan develops.
While it’s unknown if Hulu has any intention of offering shares publicly, it’s still a good idea to keep it on your radar as a possibility.