You don’t know it yet, but in five years, your main source of entertainment will be Hulu

Blessed be the fruit.
Blessed be the fruit.
Image: Reuters/Brian Snyder
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In the last 10 years, Hulu seems to have touched half-heartedly every corner of the online streaming world from. At its inception, it was a platform that aired recent television episodes; years later it would become a temporary home to the entire Criterion collection, a cinephile favorite. Eventually Hulu became a subscription-only service that charged as much as Netflix, but offered a catalog only a fraction of the size, and still had commercials on most of its programs. Over the past two years, it has worked hard to earn credentials as a studio, even with its meager library of original content.

Hulu seems to have explored every possible avenue only to wind up smaller, more scattered than its competitors, and just as expensive. It looks like a streaming service mid identity crisis. And after watching a three-minute ad shoehorned inelegantly between a joke on a TV show, or finding that your favorite program is mysteriously no longer available, you might even start to think that Hulu is waging war against the idea of attracting and retaining subscribers itself. But you’d be wrong. Despite this appearance of total cluelessness, the company is home to visionaries who understand how people will watch television in the future.

While other streaming services are busy competing with the current state of cable, Hulu, unlike its competitors,  has been building out its platform and its services in a way that anticipates the moment when digital platforms will be able to replace cable entirely and when subscribers will begin to rely more and more on their streaming services.

Which is to say: You don’t know it yet, but in five years, your main source of entertainment will be Hulu.

Over the last few years, viewers have started cutting cords with cable companies. By turning to services like Netflix, Amazon, and HBO Now for quality content, viewers who were once tied to overpriced bundles have been able to circumvent dealing with cable companies altogether. In addition to full streaming platforms, niche packages like MLB TV—which allows subscribers to pay a set fee and watch baseball on their devices—have helped contribute to this movement. There are entire online communities dedicated to cord-cutting—forums and threads with advice on how to get the shows one wants, how to stack services, how to mix and match. Cord-cutting still requires multiple subscriptions and a little ingenuity (including the time-honored practice of piggybacking off parents’s Amazon Prime accounts) in order to have access to the content you desire. No service has been able to bring cord-cutting to a single platform.

And yet, despite the growing cord-cutting movement—cable lost almost 400,000 subscribers in 2015—cutting the cord entirely is relatively rare, and relies largely on the recent rapid growth of Netflix and Amazon.

Hulu, by comparison, has grown very slowly. As Netflix approaches 80 million subscribers, Hulu is just now nearing the 15 million milestone. But before condemning Hulu for its size, remember that it doesn’t look like its fellow online streaming competitors. “Hulu is more like a basic cable network getting started,” says Tom Nunan, film producer and professor at UCLA’s film school. “They’re closer to AMC than Netflix.”

This comparison is apt: Hulu recently hired AMC’s Joel Stillerman as chief content officer. Stillerman helped reinvent AMC from a classic film channel into the studio responsible for some of the world’s most celebrated television series: Breaking Bad, Mad Men, and The Walking Dead. Hulu too, may be shifting towards powerful original content, capable of drawing millions of new viewers.

Similar to Amazon’s partnership with HBO, in 2015 Hulu began streaming Showtime content for an extra dollar a month. Unlike Amazon, however, which in many cases charges $1.99 for an episode that aired on cable, Hulu combined Showtime’s premium content with unlimited cable content streaming. Over the last two years, Hulu has also started putting out its own original content more aggressively. And while hardly any of it has had the same mass following as many of Netflix’s shows, Hulu’s content is far from second-rate. In 2015, one of its original shows, Casual, was nominated for a Golden Globe for best television. “No one is operating near the volume of original content that Netflix is,” says Nunan. “But Hulu’s already being nominated. Do you know how hard that is to accomplish? There are over 64 cable channels putting out good content.”

This past month, Hulu released its original show The Handmaid’s Tale, the popularity of which offers premonitions of growth for Hulu the way House of Cards did for Netflix in 2013.

Hulu also recently launched a Beta version of Hulu Live—a service that offers a limited selection of live streaming shows. This move, though it may appear simple, is Hulu’s way of quietly launching a campaign to assume traditional cable’s viewership and subscriber base in a way none of its competitors have begun doing. Hulu is carving out for itself a role in every area that a streaming platform can take.

One of the biggest criticisms of Hulu is that it still forces viewers to watch advertisements. Netflix subscribers would be in uproar if Allstate commercials were peppered unceremoniously throughout episodes of Orange is the New Black. The model of premium prices in exchange for uninterrupted programming has been around since HBO launched decades ago. If Hulu can get away with circumventing this cosmic law of television, it may be due to their content. Says Nunan, “Hulu’s library is almost all broadcast television-based content. We’re accustomed to seeing that content associated with ads.”

Moreover, the idea of completely ad-free television is relatively new, and something many do not yet take for granted. Dan Rayburn, digital streaming consultant, doesn’t believe that Hulu really alienates its viewers with ads. “I don’t know anyone who says ‘Okay, Hulu has good shows but I don’t want ads,’” he says. “It’s not really that much of a deterrent.” In fact, while many streaming services struggle to make a profit after spending so much on original content, Hulu has found something of a safety net with this secondary revenue stream.

In order to predict where Hulu will go in the next few years, one need look no further than Twitter, where full NFL games were streamed last year. While sports games are a giant hole in the current Hulu Live offerings, the platform’s early success in live TV means that it is poised to pick up the subscribers that ESPN is losing every year.

In 2015, CBS partnered with promoter Al Haymon to begin airing boxing matches on cable, circumventing the traditional pay-per-view model that has dominated boxing over the last decade. Hulu’s partnerships will look a lot like these in five years, and the platform will likely use its live TV capabilities to show annual blockbuster events like The Academy Awards or the Super Bowl. This combination of cable and pay-per-view style events will subsidize Hulu’s creative studio so that it can produce original content at a far greater scale than it can today.

If, right now, Hulu’s offerings look like a scattered mess of half ideas, it is because Hulu has no real scale or critical mass of subscribers. Its internal ratings metrics must look like buckshot. But it is a platform that has diversified in such a way that it can pivot and grow unencumbered. It can continue swallowing up new and different services and offering them as part of the Hulu package.

Hulu has built an entire infrastructure for itself, and it is just waiting to be filled. As it continues to grow it will become the best mix of video-on-demand and live streaming. And by the time cord-cutting is common practice, Hulu, with its many arms, will be the only platform able to accommodate the vast desires of the American viewership. It is turning itself into the future home of everything we’ll want to consume. It is the future of how we will watch TV. Hulu’s entire platform, easily mistaken for an inconsequential streaming service—struggling forever to keep up with its older siblings—is really a beta for total cord-cutting.