NEW YORK - Netflix still has the online video industry’s VIP area cornered. The streaming service added about one-quarter to its subscriber base in the first three months of the year. Rivals like Hulu are far, far behind – though it’s at least clear how they could try to close the gap.

Reed Hastings’ firm reported on Tuesday that it reached 149 million streaming paid customers worldwide at the end of the first quarter, even though it raised prices in the United States, Brazil, Mexico and parts of Europe. In a letter to investors, the Netflix chief executive indicated that there is a “short-term churn effect” as people digest the price changes and forecast fewer additional subscribers for the second quarter, but that still amounts to year-on-year growth of nearly 24 percent.

Investors are paying richly for those users. Consider that Netflix had a market capitalization at Tuesday’s close of around $150 billion. That’s more than $1,000 per paying subscriber. Compare that with Hulu, the rival service owned by Walt Disney and Comcast. AT&T just sold a stake in Hulu valuing it at $15 billion. Given it has 25 million paying users, that’s a measly $600 each.

Can anything come close to Netflix’s stature? Hulu could certainly try. With AT&T out of the picture, Walt Disney now has about 66 percent. But sharing with Comcast is hardly conducive to a clear strategy. A first step would be to simplify the ownership further, so Disney can make Hulu more directly a part of its own streaming ambitions.

The other thing is just to pay a fortune. Hulu doesn’t break out how much it spends on content. Netflix does though – it laid out nearly $3 billion in cash on acquiring content in the first quarter of the year. That number was the lowest in about a year and a half for the company, but it’s still a huge number to beat. A-list status comes at a high price.

CONTEXT NEWS

- Netflix reported on April 16 that total worldwide paid subscribers for the first quarter increased 25 percent year-over-year to 149 million. Revenue for the quarter rose 22 percent to $4.5 billion. The video-streaming service earned $344 million, or 76 cents per share, compared with $290 million a year earlier.

- AT&T on April 15 said it sold a 9.5 percent stake in Hulu back to the video-streaming service for $1.4 billion. The deal values Hulu at $15 billion and leaves Walt Disney with around 66 percent of Hulu, while broadcaster Comcast has about 34 percent.

(Editing by John Foley and Martin Langfield)

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