Hulu announced yesterday that CEO Mike Hopkins will depart after four years running the company. Hopkins is heading to Sony Pictures Television where he’ll become chairman. Taking over as Hulu CEO will be Randy Freer, currently the president and COO of Fox Networks Group and a Hulu board member. Fox is one of the main owners of Hulu.
Hopkins leaves Hulu with a strong record of accomplishment, but with many challenges still looming. He joined Hulu in October, 2013 just a couple of months after the company’s owners reversed course, deciding to invest another $750 million rather than sell it outright.
Hopkins phased out Hulu’s free, ad-supported service, while retaining a “limited” ad model in its monthly $7.99 service. But Hulu also introduced an ad-free version for $11.99 per month. Hulu has said most of its subscribers still opt for the limited ad model.
Importantly, Hulu upped its content budget under Hopkins to $2.5 billion in 2017. A big win came when “The Handmaid’s Tale” won the best drama Emmy and 7 others in September, making Hulu the first SVOD service to nab the prestigious honor. Outside of originals, Hulu has also licensed a ton of popular programming including “Seinfeld,” “Golden Girls,” “Will & Grace,” “30 Rock,” “Parenthood” and others, largely displacing Netflix as the go-to SVOD service for prior seasons.
Hulu also took steps to broaden its appeal, introducing the option for subscribers to add Showtime, HBO and Cinemax for additional fees. And it recently began offering a bundle with Spotify for students, for just $5.99, one of the strongest offers in the market today.
But perhaps the most ambitious initiative launched under Hopkins is Hulu with Live TV, the company’s skinny bundle unveiled in May. Hulu With Live TV fundamentally alters Hulu’s traditional positioning away from a pure play SVOD to also including linear streams. While Hulu’s ability to bundle Live TV with its SVOD catalog give it a differentiator relative to other skinny bundles, it’s still not clear how big the emerging category actually is, or how much upside Hulu can capture.
That’s not Hulu’s only challenge. It remains a relatively small SVOD player (it last reported having 12 million subscribers, compared to Netflix’s 109 million). It operates only in the U.S. while both Netflix and Amazon have aggressively expanded internationally. Its $2.5 billion in annual content spend is just a fraction of Netflix’s and Amazon’s. Last but not least, most subscribers still use its ad-supported offering, making it a fundamentally different SVOD experience.
Still, Hulu is a much different and arguably stronger company since Hopkins took over 4 years ago. It’s also worth mentioning that Hopkins seems to have managed the tricky politics of aligning multiple large network owners despite their own differing strategies. There haven’t been any public blowups or disputes exposed in industry trades. All in, Hopkins seems to have succeeded in bringing tight operational and strategic oversight to Hulu, which is why he was hired in the first place.