Earlier this week, Hulu executives confirmed plans to offer live streaming content to their library of on-demand programming, creating a cable-like package at a cheaper monthly price geared for cord cutters.
The effort is being pushed by Fox, Disney and Comcast’s NBCUniversal, according to media reports. While a price is still being determined, executives have hinted at $40 per month. The streaming company is still in negotiations with a few cable channels and both Disney and Fox, according to the New York Times.
The announcement by Hulu, a streaming company often looked at as the little brother to Netflix, is big for cord cutters, giving them yet another option after ditching their traditional pay TV subscription.
Here are five takeaways from the news:
Watch out Sling TV?
Once Hulu’s service launches, it’s going to directly compete with Dish Network’s Sling TV, likely the most popular streaming television service on the market today with more than 500,000 subscribers. Sling starts at $20 a month and goes up with the more channels added to a subscriber’s package. If Hulu is indeed charging $40, it needs to include some kind of value add that makes customers want to pay that extra $20 each month. Hulu’s price is more in line with PlayStation Vue, which recently launched nationwide. Sony charges $40 for that service.
It’s more than just a live streaming service
In an interview with The New York Times, Mike Hopkins, Hulu’s CEO, said the company planned to make its service personalized. “How do we make it so personalized that we are thinking ahead for you so that you don’t have to?” In Hopkins world, Hulu already knows that you like Good Morning America on ABC in the morning and Pardon the Interruption on ESPN after work. When you launch the service, your program is going to automatically start streaming, no matter what device you’re watching it on. That could be that value add mentioned in the first takeaway.
Closer to a complete bundle
Reports of Apple’s stalling efforts to create a comprehensive streaming service is due to negotiating TV rights. It’s easier to strike a deal with the cable networks, like History Channel or USA. The tricky part comes with the broadcast networks, ABC, CBS, Fox and NBC. Hulu’s package is the closest to getting all four under the same agreement, with CBS being the only network left out. That’s likely due to the fact that it’s pushing its own streaming service CBS All Access. Sling TV, which has a deal with Disney (ABC, ESPN) just landed a deal with Fox, but it doesn’t have NBC (which also includes popular cable network Bravo). If Hulu’s service proves to be popular, you could see America’s most watched network, perhaps, strike a deal to be part of the fun. That could, however, increase that monthly price.
Getting closer to cable prices
Not that much closer, though. At $40, Hulu’s new streaming service is about half of that of a traditional pay TV subscription, but it’s still higher than a Netflix subscription and it’s likely inching up on the price of a monthly cable internet bill. As these types of services become the norm, TV watchers, again, are going to have to ask themselves if they’re getting just what they want for that specific price. The biggest gripe about cable TV packages is that customers are paying $80-plus each month for a pile of channels they never watch. Expect Hulu to offer a skinnier packages for a cheaper price, alongside its on-demand monthly subscription offer at $8 per month.
Broadcast network competition?
If three of the four broadcast networks can reach an agreement with Hulu, what’s stopping them from forming their streaming service and cutting out the middle man? It’s a risk streaming companies like Hulu and Netflix are going to take in order to get in front of the competition. Today, CBS is the only network to have its own streaming service that offers live TV (outside of some programming, specifically, NFL games). But as more companies follow the route of Sling and Hulu, expect even more shake up in the space. The question will be: Who can offer the best product at the lowest price?