Want To Invest in Video Streaming? Here’s One You’ve Just Got to Watch.
Video streaming has become the most popular way to consume television and movie content. With so much popularity, the competition to provide video streaming services has never been so intense. One such provider is Hulu, and here we are going to discuss how you can buy stock in this video-streaming company.
How Much Do You Know About Hulu?
Hulu launched its public offering in March 2008. The Californian company offers video-streaming and on-demand services to customers in Japan and the United States. There are plans to extend this service globally from 2021.
Originally conceived as a joint venture between broadcast networks, including ABC, Fox, and NBC, Hulu is now under full control of the Walt Disney Company (NYSE stock symbol – DIS). Disney already held a stake in Hulu from 2009, and in 2019 they paid Comcast (NASDAQ stock symbol – CMCSA) $6 billion for their Hulu holdings. This buy-out was part of a deal in which Comcast would give up its acquisition attempt of 21st Century Fox.
Hulu’s primary offering is original content and recent television programs. Current program providers include ABC, Fox, Food Network, and NBC. Hulu also airs older programs from CBS, such as the Seinfeld back catalog. Some of its more prominent new material included High Fidelity, Utopia Falls, and The Handmaid’s Tale.
As of December 2019, Hulu had amassed 30.4 million paying subscribers. This figure was an increase on the 25 million paying subscribers that had already signed up by the end of the previous year.
You may consider this to be healthy growth; however, Hulu still falls short of Netflix (NASDAQ stock symbol – NFLX). With almost 167 million global paying subscribers by December 2019, 60 million of whom are from the United States, Netflix is the main competition in this market.
Hulu offers its customers four tiers of subscription depending on their preferences:
- Basic – $5.99/month (contains adverts)
- Premium – $11.99/month (ad-free)
- Basic + Live TV – $54.99/month
- Premium + Live TV – $60.99/month
When announcing Disney’s deal with Comcast, Robert Iger, their former CEO, stated that he thinks Hulu will post a profit by 2024, having reached 40 million subscribers. Iger believes that Hulu’s wide variety of original content, award-winning programs, live broadcasts, and its extensive library of movies and series represent the best of television.
Amazon Prime Video
Retail behemoth Amazon.com (NASDAQ stock symbol – AMZN) owns and operates its own video streaming service. Amazon Prime Video offers a variety of original and classic content across a broad spectrum of television and movie genres. The Marvelous Mrs Maisel, one of its original productions, was the winner of eight Primetime Emmy awards in 2019.
Subscribers to Amazon Prime, Amazon.com’s free-shipping service, receive Amazon Prime Video as a free bonus. Amazon Prime costs $10.99 per month, but Amazon Prime Video is also available as a stand-alone service, with no Prime subscription, at $8.99 per month.
With 167 million paying subscribers globally, Netflix is Hulu’s top competitor and the biggest video-streaming service provider by a long way. Having launched its streaming service in 2007, Netflix has developed incredible program franchises such as House of Cards, Narcos, Orange Is the New Black, Stranger Things, and The Witcher.
Netflix offers its customers three tiers of subscription depending on their preferences:
- Basic – $8.99/month
- Standard $12.99/month
- Premium – $15.99/month
Hulu IPO Speculation
There was widespread speculation that Hulu would launch an IPO in 2010. The New York Times ran an article citing industry experts’ comments about the impending IPO and the $2 billion value that the company was expected to achieve. In the end, the IPO did not happen. However, there is still an indirect channel to owning stock in Hulu through purchasing shares in parent-company Disney.
How to Indirectly Own Hulu Stock
Hulu may not yet be a public company, but there are still opportunities to profit in the video-streaming market from this company’s owner, Disney. Better still, Disney’s interest in video-streaming does not stop with Hulu; they also own Disney Plus, the home of National Geographic, Pixar, Marvel, and the Star Wars franchise. Disney is also the ESPN+ owner, a premium video streaming service of sporting events to 7.6 million paying subscribers.
Disney’s ownership of Hulu, Disney Plus, and ESPN+ had helped them amass a strong foothold in the streaming sector. Therefore, it is not surprising that shares in the entertainment giant frequently grab the attention of investors.
Steps to Buying Hulu Stock:
Steps to Buying Hulu Stock:
- Conduct detailed research of Disney’s, and its subsidiary companies (including Hulu), stock, management, and financials.
- Decide on buying the stock directly from Disney or using a broker.
- Decide the amount of capital you want to invest.
- Place the buy order.
If you choose to buy through a broker rather than directly from Disney, here are our recommendations, and why we chose them:
TDAmeritrade – The best overall performance.
TradeStation – The best technology
Webull – Best for short-term investments.
Video streaming on demand is a massive and growing business sector. MarketsAndMarkets research assessed the global video-streaming market to grow from its 2019 figure of $38.9 billion to $87.1 billion by 2024, with a CAGR of 17.5% during this period.
With Disney behind them, Hulu is in the vanguard of this growth, and are in an incredibly strong market position. Hulu is one video streaming channel that is definitely worth watching!