d.). Like Netflix, Hulu also started their online services in 2007 but only to a specific bunch of people. In 2008, they made their online services public and reached 40 million viewers in their first year (Lovan et al., n.d.). .
Online TV streaming websites have such a wide variety of content and it brings us to wonder how they make a profit (Casey, 2013). Netflix charges a mere $7.99 per month for unlimited streaming of any of their available programs which ranges around 9000 movies and 2000 TV shows. The main cost that they have to pay for is licensing cost which is what allows them to stream shows on their sites. Netflix started off with barely any viewers, within 6 years of the running of their online TV streaming services, Netflix gained 23 million customers from 6 million to 29 million. That means 29 million times of $7.99! During this time, they made about 3.6billion dollars and profited about 973 million dollars (Pisharody, 2013). To add to their income, Netflix has decided to produce an original TV show, House of Cards, which means not having to pay for licensing because it is their own production. It has proven to be a smart move because when the show came out, Netflix gained 2 million more customers. Surprisingly, Netflix does not receive external profit from advertising or pop-ups unlike their competitor Hulu (Pisharody, 2013). Hulu also like Netflix charges $7.99 per month but in contraire to Netflix, they have a 6 minute advertising break after 30 minutes of streaming. Hulu has a much smaller library of shows to choose from but they host current shows and seasons and air them online as quickly as 24 hours after its original screening time. Because Hulu was a joint venture between the likes of NBC-Universal, Fox, and Disney-ABC also adding The CW as of 2012, Hulu has access to all the big names of the TV industry. Given that, they are still struggling to compete with their competitors.
