Hulu Has a Better Shot Than Netflix at Joining the TV Bundle

/ Nov 14, 2013

hulu-plus

Like Netflix, Hulu also wants in on the pay-TV bundle. Unlike Netflix, Hulu has a much better shot of that actually happening.

According to a report from The Wall Street Journal, Hulu is in “early discussions” with cable operators including Comcast, Time Warner, Cox, and Verizon to add its service to their TV bundles. In addition, Hulu hopes such a deal would enable pay-TV subscribers to access the service directly through the cable set-top box.

If any of this sounds familiar, it’s because the other major online video service known for offering vast swaths of TV content has also been trying to cozy up with pay-TV providers. Netflix wants its streaming service available via cable boxes. And to be fair, Netflix has been successful in this pursuit — but only overseas via deals with Virgin Media in the UK, Com Hem in Sweden, and Waoo in Denmark. In the US, it’s a much different story as cable operators and networks are still hesitant to work with the service, which is quickly becoming the go-to outlet for prior seasons of television shows.

With Hulu, it’s a different story. The service is owned by three of the biggest TV companies in the world — 21st Century Fox (formerly News Corp.), Disney, and Comcast*. This makes it far easier for Hulu to get a deal done with any of the aforementioned operators — these people already know and have done business with each other.

Plus, similar to Netflix, Hulu is a huge driver of on-demand TV viewing. Except unlike Netflix, Hulu is the place to watch current-season programming, especially if you’re already a pay-TV subscriber. It would make a lot of sense for operators to offer Hulu as part of the bundle, giving subscribers one place to catch up on episodes of their favorite shows.

In fact, as the WSJ report indicates, this is how Hulu hopes to compete with Netflix. Netflix to this date has been unable to offer the latest episodes of in-season TV shows**. Hulu has been able to, but it’s also limited by the deals it has with various networks, who sometimes want people to come to their owned-and-operated sites and apps to watch episodes. If Hulu can become the de facto “TV Everywhere” option for the TV industry, offering access to every episode from any TV show, then it has a serious shot of competing with Netflix.

Netflix might be getting a lot of press for its originals — a lot of which is deserved — but its bread and butter is still the TV shows and movies it’s able to offer in its catalog. If Hulu can buy back some of that exclusivity from the TV industry, then the service has a lot of upside.

All of this, again, will come at the expense of the service’s original programming. It was evident when Hulu hired Mike Hopkins, a long-time TV distribution exec (most recently at Fox), as its new CEO. Hopkins’ expertise is in what Hulu already does for the TV industry. The original shows on Hulu’s programming lineup — as great as some of them are — will be be an afterthought for the foreseeable future.

* Comcast has no operational oversight with Hulu due to FCC regulations tied to its acquisition of NBCUniversal.

** In the UK, Netflix offered new episodes of the final season of “Breaking Bad” on an exclusive basis the day after they aired in the US.

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