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Hulu to compete with Sling TV via new cable TV-like service

TechCrunch TechCrunch 2/05/2016 Sarah Perez

Sling TV may have some new competition. According to a Sunday night report from The WSJ, Hulu is nearing agreements to license channels from its co-owners Walt Disney Co. and 21st Century Fox, in order to flesh out a new, cable-TV like service. Hulu is aiming to launch this service in Q1 2017, the report said, which would include channels like ABC, ESPN, Disney, Fox, Fox News, FX and Fox’s sports channels.

Comcast’s NBCUniversal is also a part owner of Hulu, but hasn’t yet agreed to participate in this new offering. Talks with other programmers have also begun, The WSJ said.

Dish-owned Sling TV has attempted to carve out a niche for itself among other streaming services by providing a combination of live TV and on-demand programming, including movies. But its main focus is on streaming live cable television channels over the internet, without requiring users to subscribe to a traditional pay TV service in order to access them.

Hulu’s plans, as described, sound similar. The new service would stream live feeds of both broadcast and cable TV channels. This would position it to compete not only with Sling TV, but also services like Sony Playstation’s Vue, as well as Comcast’s own over-the-top service Stream. (This latter item could also explain why Comcast’s NBCUniversal hasn’t yet agreed to participate in Hulu’s new service.)

While today’s version of Hulu is available for $7.99/month, or $11.99/month without commercials, the new streaming TV service would be more competitive with a cable TV subscription, at roughly $40/month. This would also include a cloud-based DVR and a way to watch past episodes on demand, like many pay TV providers already allow for today. The service would include ads, as well, the report noted.

Hulu’s entry comes at a time when the streaming market has become very crowded.

For consumers considering going the route of cord-cutting, there have never been so many options to choose from – but it can also be confusing to know which services to choose. Most current Netflix customers still see the value in retaining their subscriptions, and Amazon Prime members have a range of free, streaming video, including originals, TV shows and movies, which come along with their annual subscription to the retailer’s two-day shipping service.

For those cord-cutting in an effort to save money, combining these two services, and then perhaps Hulu, along with a digital antenna for broadcast channels, typically suffices. Adding on HBO NOW or some other niche streaming service can then bump back up the price paid for streaming “TV” to nearly that of a traditional pay TV subscription. In other words, cord cutters choose these add-ons carefully.

And there are so many add-ons: Amazon lets you buy add-on subscriptions like Showtime, Starz, and more; YouTube Red offers a commercial-free tier with originals; cable channels like Showtime, HBO, Starz, Lifetime, Nickelodeon, and more have their own over-the-top apps; Spotify has added TV shows and videos; Vimeo and Vessel bring web video subscriptions; media network Fullscreen now has its own streaming service; there are streaming services just for art house and indie movies like Tribeca Shortlist and Turner’s forthcoming FilmStruck; and so on.

Beyond those cord-cutting out of frugality, there’s an entirely different market composed of those who want the flexibility of a modern streaming service, but are still itching for something that better resembles cable TV. That’s where Sling TV’s pitch comes in, with offers of the “best of cable” and live sports via ESPN. At $20 per month for its base offering, however, it would be half the cost of Hulu’s TV streaming service. PlayStation Vue at $30 to $40 would be more competitive.

This is the market Hulu seemingly wants to target with the new service, which is still yet unnamed. But it’s unclear how big a market that will be: Sling TV reportedly has 600,000 some subscribers, for example. Many of those are there just for ESPN, though. For comparison’s sake, Hulu’s on-demand video reaches 10 million subscribers. Whether some of those subscribers and new ones will want to shell out more money to return to cable is still a big “if,” and a big bet on Hulu’s part.

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