Video streaming site Hulu finally may be ready to dive into full-on Internet TV.
Hulu, which is co-owned by the parent companies of three U.S. broadcasters, is working on a subscription service that would add feeds of live broadcast and cable TV channels to its current Netflix-like catalog of video-on-demand shows and movies, the Wall Street Journal reported late Sunday.
Hulu declined TheWrap’s request for comment.
Disney and 21st Century Fox, two of Hulu’s owners alongside Comcast, are near agreements to license many of their channels to the platform. WSJ reported Disney is offering ABC and ESPN, while Fox will include its broadcast network, Fox news, FX, and national and regional sports channels.
The service may launch by the beginning of next year, but a price isn’t set, although the article reported it is expected to be around $40 a month.
Hulu has long been crimped by its parentage from throwing itself headlong into becoming an online site for television. Its ownership by some of the biggest television companies — which are also all competitors against each other — meant Hulu walked a tightrope whenever it approached emerging standards of digital TV, since so many conflict with lucrative, long-held business practices for traditional programmers.
One such legacy model is bundling, which is when programmers clump together smaller networks with their must-have channels and selling the content as a whole package to traditional distributors like cable and satellite companies. But online TV options have won ground offering “skinny” bundles that have fewer, selective channels for a lower price.
With the reported new offering, Hulu would essentially be offering skinny bundles of its own for the first time.
Analysts were split on repercussions from the possible move.
Bernstein’s Todd Juenger said the move could amount to Hulu’s parents declaring war on their distribution partners like cable and satellite, while the pricing growth from a “skinny Hulu” would be much lower. As part of a no-contract package on Hulu, networks would gain and then lose subscribers at an unprecendented level, since online TV terms make it much easier to join up and then quit than cable and satellite contracts allow.
However, Steven Cahall at RBC Capital Markets noted the important takeaway from the news is that it indicates a way for programmers “to take more control of their destiny” as the pay-TV industry fragments into a myriad of providers.