Hulu gained on Netflix in the US during a year of massive user growth, but there's a big challenge it will have to overcome in 2019 to keep up the pace

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Hulu CEO Randy Freer

• Hulu now has 25 million subscribers, adding 8 million more in 2018 for 48% year-over-year growth.
• CEO Randy Freer told CNBC that he thinks it's possible for Hulu to catch up to Netflix, which has over twice as many subscribers as Hulu in the US.
• Hulu lost an estimated $1.5 billion in 2018, and has discounted subscription prices at least twice since October 2017.
• On Cyber Monday in November, it offered a limited deal of $0.99 a month.

Hulu ended 2018 on a strong note. The company announced on Tuesday that it now has 25 million subscribers, adding 8 million last year for 48% year-over-year growth.

CEO Randy Freer told CNBC on Tuesday that Hulu "added more subscribers in the US than Netflix" in 2018, and that he thinks it's possible to catch up to Netflix, which is the reigning streaming champion. Netflix has 137 million subscribers worldwide, and 58 million in the US.

"We think we can add more and more subscribers because what people want is a differentiated product," Freer said on CNBC. "People want the ability to make one choice into the home, and I think Hulu will have the opportunity to do that."

But Hulu still has a long way to go if it wants to reach Netflix's numbers, especially as more players enter the streaming game. Disney (which owns 60% of Hulu) and AT&T (which owns 10%) are expected to launch their own platforms this year.

READ MORE: Netflix will go head to head with Disney in 2019, with Wall Street estimating it will spend up to $3 billion on original movies

Money is gushing into the ecosystem.

Netflix said its content budget for 2018 would be up to $8 billion. And in a report released this week, Barclays analysts estimated that Netflix would spend up to $3 billion on original movies alone in 2019.

To compete with Netflix and others, Hulu has to invest - but it already loses a hefty sum of money each year doing just that. Hulu lost an estimated $1.5 billion in 2018, up from the $920 million it lost in 2017.

Netflix has also burned plenty of cash in its quest for more subscribers. Netflix estimated its negative free cash flow would be $3 billion for 2018 and be similar in 2019.

Growth is the most pressing concern for the big streamers like Netflix, Hulu, and newcomers like Disney (Hulu's majority owner that will launch its own streaming service this year). Everyone is spending big to grow.

But besides big investment, Hulu's growth has also been boosted by promotional pricing.

Hulu has offered discounted subscription prices at least twice since fall 2017.

Hulu offered its limited commercials plan for $5.99 a month for the first year in October 2017. The deal was available until January 2018. At the time, Netflix had raised its prices, and is likely to do so again this year, according to a report from Piper Jaffray analysts released in November.

In November, Hulu offered its deepest discount ever with a Cyber Monday deal of $0.99 a month for the first year for its limited commercials plan.

The biggest question as 2019 kicks off is if Hulu can keep up that subscriber growth, and gain ground on Netflix, without discounts, especially as Disney launches its branded streaming service. Another is whether those $0.99 subscribers will stick around for years to come.