Hulu said fully 65% of live viewers stick around to watch other shows - here's why that matters

Ramy Hulu

Hulu Original "Ramy."

• Sixty-five percent of Hulu Live viewers go on to watch Hulu's library or on-demand content, said Hulu exec who spoke at an event in New York on Tuesday.
• That benefits Hulu because it keeps all revenue from the advertising sold on on-demand content, but only 15% of the ad revenue it gets from the live service.
• The news is noteworthy as streaming services like it struggle to find an economic model that works.

Video streaming service Hulu has frequently touted its unique approach to digital live TV. On Tuesday at an OTT event hosted by The Trade Desk for media buyers, Hulu said 65 percent of its live viewers go on to watch library or on-demand content.

That benefits Hulu because it keeps all of revenue from the advertising sold on on-demand content, but only 15% of the ad revenue from the live service. Hulu CEO Randy Freer has previously said this model has boosted the margins on Hulu Live.

Doug Fleming, Hulu's head of advanced TV who spoke at The Trade Desk event, didn't say how much margin improvement the company has seen by giving Hulu Live subscribers access to Hulu's entire library.

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Hulu's subscriber growth outpaced Netflix in 2018 and the first quarter of 2019. Fleming said to meet advertisers' growing demand to buy programmatically, Hulu created a new programmatic ad-sales team of about 14 employees.

"We feel like it's all about choice and control," Fleming said. "Automation is a thing. It's not a passing fad or a trend, and we don't want to stand in the way of that."

Hulu Live's viewer base is a small percentage of the total - about 2 million of Hulu's total 28 million customers, according to reports. But the revelation that nearly two-thirds of those customers view VOD content is noteworthy as vMVPDs struggle. Digital live-TV packages were once considered a way to ease the pain caused by the slow death of pay TV, but their margins are horrible and their growth has already started to slow.

In the past several months, DirecTV Now, Fubo TV, and YouTube TV have increased their prices to $50 a month or more. Hulu Live costs $44.99 a month with advertisements and $50.99 for ad-free.