Hulu + Live TV pushed past the 4 million subscriber mark during the third quarter and in doing so became one of the largest MVPDs in the U.S.
Disney said the service added 700,000 subscribers to reach 4.1 million total subscribers. That is the most of any virtual MVPDs – YouTube TV is the next closest with 3 million subscribers. It also puts Hulu ahead of some traditional MVPDs like Verizon, which ended the third quarter with 3.93 million pay TV subscribers.
Hulu also has more subscribers than cable operators Altice USA (3.06 million) and Cox, which had 3.77 million pay TV subscribers at the end of the second quarter, according to an estimate from Leichtman Research Group. The service is now the fifth largest U.S. MVPD behind Comcast, AT&T, Charter and Dish Network.
Like many other vMVPDs, Hulu + Live TV has raised its prices within the past year. In November 2019, the service increased the price of its base package by $10, bringing the cost up to $54.99 per month and closer in cost to traditional MVPD video packages. Nevertheless, Disney CEO Bob Chapek said Hulu + Live TV has been able to capitalize on cord cutting.
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“I think [Hulu + Live TV] will increasingly act as a solution to those households that have walked away from their traditional, more traditional cable type of subscriptions,” he said, according to a Seeking Alpha transcript. “And that's one of the reasons why we're really bullish about that business.”
Media analyst firm MoffettNathanson said that Hulu + Live TV brings in $2.7 billion in annual revenue, the most of any U.S. vMVPD, but warned that profits are likely still low.
“Yet, given the high and ever-rising variable cost of programming, we see these businesses as low margin endeavors that probably should not be valued using a Netflix multiple,” wrote Michael Nathanson in a research note.