• by Wayne Friedman , May 23, 2016

For Hulu, the premium digital video service, value has climbed sharply, according to one media analyst -- and the company could be profitable in two years.

Credit Suisse says Hulu is now worth $25 billion -- up from $15 billion. Hulu is owned by Disney-ABC Television, 21st Century Fox, and Comcast Corp.

This would be a dramatic rise from the price tag analysts say Time Warner was considering in a possible deal to buy Hulu a year ago -- $5 billion. The three TV-based media owners had been considering a sale of the service.

Omar Sheikh, media analyst for Credit Suisse, says Hulu could be profitable in two years, believing it could generate profits of $2.2 billion per year by 2020. He says Hulu has had $1.4 billion of cumulative losses since 2008.

Helping this along, Sheikh says, would be a new live streaming service costing around $40 a month -- which could have at minimum 10 million subscribers by 2020, and possibly as high at 20 million.

For its existing Hulu business, the video service now has 12 million subscribers -- up from 9 million a year ago. The biggest premium digital video service, Netflix, currently has 45 million U.S. subscribers.

Hulu executives have said the vast majority of its subscribers chose the $7.99-per-month advertising-supported plan versus the more expensive commercial-free one for $11.99 per month.

J.P. Morgan’s Alexia Quadrani had estimated Hulu revenues to hit nearly $2 billion in 2016 (57% from subscription fees and the rest from advertising) and nearly $2.4 billion in 2017 (61% from subscribers revenues/39% from advertising).