- Hulu makes money through subscriptions, advertising and now live TV plans.
- The company says half of its revenue comes from advertising.
- It hopes to convert people who left cable and satellite back to TV plans.
Hulu's business model gives it three ways to make money through streaming content, CEO Mike Hopkins told CNBC.
The company has long offered subscriptions to its library of licensed and original content, both with and without advertising. Now that it's adding a live TV service, it will have another revenue stream — something its competitors like Netflix and Amazon don't have.
"We are committed to the subscription on-demand space," said Hopkins. "It is really the lifeblood of our company, but we're also really excited to enter this new, emerging over-the-top paid TV space as well."
Hulu with Live TV launched Wednesday at its Digital Content NewFront presentation in New York, an annual presentation to advertisers of upcoming programming. The subscription allows access to 50 live channels, as well as the platform's library of content and cloud-based recording storage for $39.99 a month.
Users can add more DVR space, additional premium channels and unlimited streams for additional fees. Hulu also announced a second season of its series "The Handmaid's Tale" and five new original shows at the event.
Hulu currently has 47 million unique viewers, according to Hopkins, less than half of Netflix's 98.75 million. However, 33 million of Hulu's viewers see advertising.
"Subscribers aren't the only way to measure us, when almost half our revenue is advertising," Hopkins said.
Adding live TV further diversifies the company. While Hopkins said a majority of its users still have a cable or satellite TV service, the company is looking ahead and hopes to re-convert people who may have quit paid TV. It is only based in the U.S. for now, but Hopkins didn't rule out additional countries in the next three to five years.
"As people's taste change, as people want these different experiences we need to capture them as they are coming out," he said. "I think we can actually get people who opted out of the system back in through a service like Hulu live TV."
Disclosure: Comcast, which owns CNBC parent NBCUniversal, is a co-owner of Hulu.