Hulu to Launch Pay TV Service, Joining Other Digital Players

Hulu is the latest platform to compete with traditional pay TV services. Separate from its current on-demand programming model, Hulu plans to launch a cable TV-style online service in Q1 2017, say those familiar with the company’s plans. Hulu co-owners 21st Century Fox and The Walt Disney Company are likely to strike agreements to license many of their channels. ABC, ESPN, Disney Channel, the Fox network, Fox News, FX and Fox national and regional sports channels are also anticipated to be part of the lineup.

The Wall Street Journal notes that, although Comcast’s NBCUniversal is also a Hulu owner, it is a silent partner and has remained mum on its potential plans to participate in the new offering. But the service “isn’t looking to offer all the hundreds of channels found in the traditional cable bundle,” say sources.

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The new service will be pitched to more than 10 million people who subscribe to Hulu’s current on-demand service, as well as non-subscribers. No monthly fee has been set for the new service, but Sanford C. Bernstein media analyst Todd Juenger estimated the cost at “around $40 a month.” The as-of-yet unnamed service will “likely also offer a cloud-based digital video recorder and a way for viewers to watch past episodes of shows on-demand.”

Other media companies that have launched online platforms vying with cable TV include CBS, Time Warner’s HBO, Amazon, YouTube, AT&T, and T-Mobile. Most are delivering subscription pay TV for between $24.99 and $39.99. Apple’s efforts to launch a service last year, however, has foundered over the difficulty in licensing programming at a price that would allow it to offer the service at a monthly rate attractive to cord-cutters.

Dish Network’s Sling TV and Sony’s PlayStation Vue, says WSJ, are “the only companies to have accomplished the feat with services available nationwide,” with Sling TV at $20 a month and PlayStation bundles starting at $30 to $40 a month. Sling also launched a multistream option, but NBCUniversal and Disney haven’t yet added their programs.

In response, cable TV companies are offering “skinny” bundles, such as Comcast’s $15-a-month Stream, although Comcast and Time Warner Cable say most of their new customers prefer traditional packages.