I sat down with Hulu CEO in an exclusive interview and he shared some new stats on Hulu's growth. The streaming video service will generate $260 million in revenues this year.
Just a month ago the company said it would hit $240 million in revenue this year, and it's more than double the $108 million the company brought in last year.
The vast majority of Hulu's revenue comes from ads, but I was surprised to hear that subscription service "Hulu Plus, which launched November 17, already is contributing a "material part" of revenues.
Hulu is profitable, and has been for five quarters. Kilar tells me that Hulu's business model is actually predicated on thin margins: it wants to give as much revenue back to its content partners (and co-owners) so they give Hulu more content. Hulu is co-owned by CNBC's parent NBC Universal, News Corp, and Disney along with Providence Equity Partners.
But Hulu faces more competition than ever — how can it keep up with the likes of Netflix? Netflix's streaming option costs exactly the same as the premium "Hulu Plus" subscription. Plus Netflix recently signed a rich deal with Disney for more access to Disney content, which means there's more overlap between what the two services offer.
Kilar was adamant that Hulu is not directly up against Netflix and Apple TV. He stressed what makes Hulu unique — it's the only place where you can find current season content. It's also the only one of these services that's ad-supported, which allows they to offer a free version and to keep prices of the subscription option down.
But what happens when Netflix and Apple get more current content? That's when the race will really heat up, and it'll give consumers more options to "cut the cord" with their cable provider. What about that cord cutting question? Kilar says it's still preliminary; we'll see if he's singing the same tune a year from now.
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