Handmaid's Tale Season 2 poster

Hulu’s big bet on big debt: Will spending now on award-winning shows like The Handmaid’s Tale pay off down the road?

Contributed by
Aug 10, 2018

Hulu’s not the only player in the streaming game to rack up a mountain of debt as it broadens its content lineup — it’s only the latest. But will spending boatloads of cash to keep critically acclaimed shows like The Handmaid’s Tale and other genre binge-ables draw the kind of subscription base that can rival Netflix?

The Wrap reports that the multi-owner streaming service (Comcast, parent company of NBCUniversal, which owns SYFY WIRE, holds a 30 percent share) is headed toward a $1.5 billion loss by the end of this year, thanks to its commitment to expand its programming and swell its subscriber base.

It’s the sort of long game that Netflix has played for years, with critics watching from the sidelines waiting for the bubble to burst. But somewhere in between tentpole shows like Stranger Things (which cost Netflix about $8 million per episode in its second season) and a focus on global signs-ups, the red-letter streaming giant finally appears to be seeing a tangible and growing return on its years-long investments. The loss margins at Netflix continue to shrink, even as investors’ valuation of the service continues to rise.

No show means more to Hulu’s credibility, nor its appeal to would-be subscribers, than The Handmaid’s Tale, the dystopian adaptation of the Margaret Atwood story that explores a brutal alternate version of American history. But it’s not the only genre show that’s got Hulu shelling out the cash.

Over the past year, the service has followed Netflix’s example by doubling down on its original genre offerings, adapting Stephen King’s Castle Rock into a well-received run of first-season episodes, while committing to a diverse lineup of other first-run sci-fi, horror, fantasy, and animated projects. 

There’s the exclusive deal with DreamWorks Animation, which includes originals that will be exclusive to Hulu as well as access to DreamWorks’ library titles including ShrekShrek 2, and Shark Tale. Then there’s the long-brewing reboot, in partnership with Warner Bros. and Steven Spielberg, of Animaniacs. As if to assure horror fans that it isn’t stopping with Castle Rock, Hulu’s also developing an original series with Blumhouse called Into the Dark, which will theme each of its creepy episodes around one of the 12 months on the calendar. There’re also reports of other genre projects based on Anne Rice's Vampire Chronicles, Top Cow’s Postal comic book, and — for the true lover of esoteric animated TV shows based on existing merchandise — the quirky-but-popular Uglydoll toys.

“Falling in the red isn’t completely in vain,” notes The Wrap, “as Hulu has seen progress on several fronts... [I]ts subscriber base is growing, with 20 million customers in the U.S. paying at least $7.99 a month. Hulu’s live TV service, launched last year, runs $39.99 a month and has about 800,000 subscribers.”

Now that Disney is set to own a majority 60 percent of Hulu, the future of the third-place streaming service’s offerings (Netflix and Amazon both have more subscribers) is more difficult than ever to gauge. But original shows like The Handmaid’s Tale and Castle Rock already have gained strong traction with viewers, giving those franchises the kind of foothold that’s hard to imagine eroding — regardless of how the streaming landscape changes around them.