Hulu is planning to change up its live TV service by dropping channels from its core offering to instead create smaller “bundles” of sports, news, and entertainment programming, according to an interview with Hulu CEO Randy Freer in The Information. The changes, which would make Hulu more of a direct competitor to skinny bundle providers like Dish’s Sling TV, could help to reduce costs for consumers and Hulu alike, and free up funds for increased investments in original programming.
The company today offers a $40 per month bundle of over 50 channels, but is considering breaking that up into separate packages, Freer said. For example: a sports bundle, news bundle or an entertainment bundle with premium channels like HBO, Starz and Showtime.
In addition to plans to increase its original content spend, in the wake of successes like “The Handmaid’s Tale” and “Castle Rock,” Hulu also said it wants to become an aggregator of other streaming services.
That means it could sell others’ streaming offerings on top of its own bundles and live TV service – a move that would pit Hulu against Amazon’s Prime Video Channels, or Walmart’s upcoming efforts with Vudu.
However, this strategy could also be useful if content owners begin pulling content out of Hulu and into their own streaming services – Hulu could become the wholesaler for those services, in exchange for a percentage of the revenue.
Hulu’s live TV service today has over a million subscribers, while its on-demand service has 20+ million. The company’s ability to offer both under one roof, allows it to benefit when doing deals, the report noted.
While live streaming services tend to lose money – The Information says YouTube TV loses $9 per subscriber per month, for example – Hulu is able to offset its costs by negotiating better rates on on-demand deals when making its live streaming deals. It also sells ads against its programming, which earned it over a billion in ad revenue in 2017 – a figure that’s expected to grow this year.