The cable television model appears on the precipice of collapse (or at least dramatic change), and you can count Hulu among the vultures swarming to grab a piece of the carnage.
According to The Wall Street Journal, the online streaming service is developing a service that would allow subscribers to live stream broadcast and cable television channels. WSJ reports that Disney-owned ABC, ESPN and Disney Channel are already on board, as are FOX, Fox News, FX and FS1.
This arrangement mirrors CBS All Access and HBO Now, services intended to target cord-cutters and recoup some revenue from the growing body of consumers who view cable as a luxury more than a necessity. Unlike, those efforts, the Hulu initiative delivers networks’ content through a third party. Currently, most TV stations are available to stream only for those who subscribe to the channel through their cable package. From WSJ:
Hulu hasn’t set a price for its planned service but Sanford C. Bernstein media analyst Todd Juenger estimated that it would likely cost around $40 a month. An executive close to Hulu said that figure was in the ballpark.
The service will likely also offer a cloud-based digital video recorder and a way for viewers to watch past episodes of shows on-demand, as they can do on many cable and satellite TV services. Hulu is planning on having targeted advertising in its service, according to the people familiar.
Of course, Hulu itself (along with Netflix) has contributed greatly to the decline of cable TV. Many people feel they don’t need to pay high monthly fees to access shows on TV that they can get on demand on their computers for a small monthly fee (or for free if they know one generous person with a password).
The whole situation loosely mirrors the music industry, where consumers stopped buying the product directly and began streaming through a third party (Spotify), leaving artists with a sliver of their previous profits. This new Hulu initiative sounds kind of like the equivalent of Tidal, an alternative that more directly feeds the content producer, while remaining more affordable to the consumer than the old model.
Hulu is far from the only company vying to transmit cable TV directly to viewers. As WSJ notes, Sling TV and PlayStation have come out with similar services, but Hulu has the advantage of an identifiable brand name in the streaming world and a base of more than 10 million subscribers.
The status quo for broadcast and cable television doesn’t appear durable, and services like the one Hulu is working on might be the best way forward for networks that don’t want to live in a world ruled by Netflix original content.