A public partnership with another big name streaming service makes Spotify more attractive. However, the $1 billion debt Spotify finds itself in at the end of 2017 is likely to throw possible investors off as it prepares to declare IPO (ie. Lack of revenue can be attributed to royalties the company must pay for their label and for each new subscriber before Spotify even begins benefitting from subscription revenue. Of course Hulu would want association with Spotify to compete against Netflix, but how does Spotify benefit from a deal with a lesser-known service? Spotify, though large and widely used, has yet to make profit in its eleventh year. Hulu, the second-largest TV and movie streamer, hopes to gain recognition and customers through its partnership with Spotify. However, the number of college-aged adults who even own cable is on the decline faster than Hulu gains subscriptions. By streaming episodes of current shows, Hulu cuts out the need for cable for many subscribers. Netflix’s library is mainly movies and full TV series, while Hulu relies on deals with large broadcasting networks to supply media. It’s expansive reach, of 190 countries, and cultural significance (Netflix and chill?) puts pressure on Hulu to stay relevant.Īnother factor to consider is content. A number that, until very recently, surpassed all music subscriptions. Netflix has the most subscriptions, with 104 million, of any streaming service in the world. What motive lies behind Hulu's sacrifice of profit? The answer is their competitor: Netflix. As Spotify subscribers can take advantage of the deal with no extra cost, Hulu, normally $7.99/month with ads, is essentially giving their streaming service away for free. Spotify (Premium) and Hulu (with limited ads) are offering a bundle for $4.99/month-a new deal presumably designed to attract college students. Two major streaming platforms just made late nights and early mornings a little more bearable when they announced their first partnership - with promises of more to come.
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