Hulu may be Netflix's biggest rival

The New York Times

"Netflix is soundly beating its streaming rivals — in subscribers, viewing time and library of content. But one is closer than the others: Hulu," says Edmund Lee, who points to Hulu's 47% jump in subscribers last year compared to Netflix's 12%. Hulu has struggled to steer its own course due to its many corporate overlords, but the Fox-Disney merger and AT&T selling back its 10% share will likely bolster the streaming service, says Lee. "While it may not generate much hype, Hulu is Netflix’s closest competitor, despite some key differences between the two companies," says Lee. "Almost stubbornly, Netflix sells one thing — a deep assortment of original and licensed shows and films meant to please almost every niche. Hulu, on the other hand, has three products that may better reflect what the future of streaming will look like. It has a live-TV service that replicates a small cable bundle at $45 a month; a video-on-demand service that sells for $12 a month without ads (this one acts most like Netflix); and a streaming service with advertising that costs $6 a month. The last one is Hulu’s most lucrative business and points to future profits. Even though it charges $6, the service generates more than $15 in revenue per subscriber each month, because of the high-cost advertising sold against those customers, according to two people familiar with the business. That would explain why Hulu lowered the price of the ads-based service by $2 this year — and it might also explain NBCUniversal’s interest in starting its own ad-based streaming network by 2020."