As Fox’s Randy Freer comes in as CEO at Hulu, replacing Mike Hopkins, who will be running the TV business at Sony, at least one analyst has questions about how successful Hulu can be.

“The SVOD service, co-owned by four of the largest and most important media companies in the world, has existed for eight years, but seems stuck at only about 12 million subs, going nowhere fast,” said Todd Juenger of Sanford C. Bernstein in a research note Friday.

As Juenger sees it, after going through three bosses in four years, “being CEO of Hulu is rapidly becoming just as dangerous an occupation as drummer for Spinal Tap.

One issue is Hulu seems to be shelling out big buck for off-network content from its owners—Disney, Comcast, Fox and Time Warner—and not spending enough on original shows that bring in new subscribers, like The Handmaid’s Tale, which won an Emmy as best drama series.

“If you were actually trying to grow Hulu, you almost certainly would have a different content strategy,” Juenger notes. “You'd spend a lot more of your budget on what industry executives are increasingly referring to as ‘Acquisition Content’ (e.g. Handmaid's Tale), and a lot less on ‘Maintenance Content’ (e.g. re-runs of Parenthood).”



(Juenger wonders how many people subscribed to Hulu, watched Handmaid's Tale, then canceled.)

Netflix is doing to opposite, spending billions on originals and lowering its dependence on the off-net shows that the big media companies seem to be steering towards Hulu.

At the same time, each of those Hulu owners is on a path to launch their own independent OTT services and those would compete with Hulu. The content that Hulu is now buying, like kids programming from Disney will move to the parent company’s service when, for example, Disney launches its Disney-branded streaming service in 2019

Hulu has said it will spend $2.5 billion on content in 2017. Juenger figures that means Hulu will be losing about $1 billion, based on subscription revenue of $1.151 billion and ad revenue of $576 billion.

“No wonder Hulu has not had the wallet to pursue a more ambitious slate of original Acquisition content,” he says.



When asked for comment, Hulu responded, “The vast majority of the assumptions and numbers reflected in this report are categorically incorrect."