Hulu got a taste of the award-winning life last year with its hit drama A Handmaid's Tale, and it's hoping to again in 2018. 

The streaming service just scored the highly sought after rights to develop Little Fires Everywhere, a series based on Celeste Ng's 2017 best-selling novel. Hulu reportedly outbid several other big name rivals for the limited series that will be produced by Reese Witherspoon's Hello Sunshine production company.

Considering Witherspoon's success in the 2017 awards season with the show Big Little Lies, it seems like a match made in heaven. It's also another sign of how competitive the market has become for both production talent and scripts. 

An ad for Hulu's "The Handmaid's Tale" shows Elisabeth Moss as Offred

Hulu has been scooping up awards for its programs. Image source: Hulu.

When rights to Little Fires Everywhere hit the market, it started "a competitive bidding war that ignited Hollywood," Hulu noted in its statement. The passionate fight over the eight-episode drama is a testament to Witherspoon's growing power in Hollywood, as well as Ng's writing talent. 

Last year, Hello Sunshine released Big Little Lies on HBO, where it won eight Emmys, including Outstanding Limited Series. The show has been renewed, and when the second season debuts in 2019, Meryl Streep will join the cast. 

Witherspoon's production company is also working with another up-and-coming streaming video player: Apple (NASDAQ:AAPL). At the end of 2017, the tech giant scored a highly coveted drama series about the people who produce a daily morning TV show, starring Witherspoon and Friends' Jennifer Aniston. Apple's second project with Hello Sunshine is a true-crime series called Are You Sleeping?, starring The Help's Octavia Spencer. 

Ng's talent should help propel the series' success. Her first published novel, Everything I Never Told You, was a New York Times best-seller, as well as Amazon's No. 1 Best Book of 2014. Her second, Little Fires Everywhere, was a New York Times best-seller, Amazon's No. 2 Best Book of 2017, and the winner of Goodreads Readers Choice Award 2017 for Fiction. 

If that wasn't enough star power to draw audiences in, Scandal's Kerry Washington has signed on to star in the series alongside Witherspoon. With this much well-known talent involved, Hulu won't  need to market the series too hard. Audiences will come to it. 

Hulu became the first streaming site ever to take home an Emmy Award for Outstanding Drama Series when it won for A Handmaid's Tale, which also earned Hulu its first two Golden Globe awards. The company is clearly hoping for another critical favorite in Little Fires Everywhere

Hollywood's ongoing talent wars

The bidding war over Little Fires Everywhere was just one of many talent and script tussles across Hollywood as TV studios and streaming giants all fight for projects they hope will lure in viewers. At this point, if a streamer wins a project that has big names attached, it's safe to assume that it was fought over before finding a home. For example, multiple networks were said to be pursuing the Witherspoon-Aniston drama that Apple ended up winning. 

In August, Netflix (NASDAQ:NFLX) signed an estimated $100 million multiyear production deal with former ABC Studios creator Shonda Rhimes, known for hit shows like Grey's Anatomy and Scandal. Then in February, Netflix signed a $300 million multiyear contract with series creator Ryan Murphy, who was previously at Twenty-First Century Fox and is behind hit shows like Feud and American Horror Story.

Meanwhile, Disney (NYSE:DIS) recently hired former Apple and Samsung exec Kevin Swint to help it launch its new streaming service, due to go live in 2019. Swint previously worked for two years as vice president of product, content and services at Samsung. And before that, he spent five years as the director of international movies at Apple's iTunes.

Apple seem to be doing well with its two Witherspoon projects, but it also has other series in the works. It's set to revive the Steven Spielberg anthology series Amazing Stories for 10 episodes, with a reported $5 million budget per episode. And in March, it ordered two 13-episode seasons of the animated comedy series Central Park, from the creator of Bob's Burgers

Hulu's biggest problem

Founded in 2008, Hulu's content has helped it attract a solid base of 17 million subscribers. That's admirable, but still far below Netflix's nearly 118 million worldwide subscribers. 

In order to grow its subscriber base, Hulu knows it has to keep spending money to produce high-quality shows like A Handmaid's Tale. That explains why Hulu lost an estimated $920 million in 2017 and is expected to lose $1.7 billion in 2018, according to BTIG media analyst Rich Greenfield. 

Hulu spent an estimated $2.5 billion on content in 2017, but the bottom line is that it doesn't have enough subscribers paying for that content to turn a profit. Meanwhile, Netflix turned a healthy profit last year despite its $6 billion 2017 content budget, thanks to its large subscriber base.

With Hulu stuck in a loop where it has to spend money to gain more subscribers, its balance sheet will probably get worse before it gets better.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.