Once upon a time (two whole years ago!) the idea of successfully getting an internet-based cable alternative up, running, and profitable seemed, perhaps, like a pipe dream. These days, even though we don’t know if the ventures are exactly profitable, the online competition to get your monthly TV dollars is fierce. And now Hulu is latest player to grab some big headliners for itsplan to start zapping linear TV channels to your online eyeballs.
Hulu announced this week that its streaming TV service, set to launch at some nebulous point in “early 2017,” has managed to ink deals with some big broadcast and networks to bring them on board.
Channels that have agreed to be a part of the live and on-demand service include broadcast networks Fox and ABC as well as a whole pile of cable channels: the Fox Sports and ESPN collections for the sports fans; Disney, Disney X D, and Disney Junior for the kids; Fox News and Fox Business; and National Geographic. That’s on top of an earlier deal that saw CNN, Cartoon Network, TNT, TBS, and others signing on.
If you feel like you’re sensing a pattern here, you’re right: All of the participating channels announced to date are owned by Time Warner, Fox, or Disney.
Time Warner now owns a 10% stake in Hulu; founding partners Disney and Fox each currently own a 30% stake in Hulu.
That leaves one key player, and likely content partner, as yet unannounced: Comcast, which through NBCUniversal owns that remaining 30% stake in Hulu, and has a wide range of broadcast and cable channels it would no doubt like to get in front of more viewers.
The Hulu deals, meanwhile, ably highlight why vertical integration is a tricky proposition. Consider: because Comcast owns NBCUniversal, if that content signs on to this Hulu service then Comcast wins whether or not you subscribe to traditional Comcast cable. If you have an internet connection, and then pay for Hulu access, Comcast would still theoretically get a good chunk of your money.
Vertical integration issues now also apply to Time Warner’s stake in the venture, since AT&T is set to gobble Time Warner all up. If that merger gets approved, then AT&T and Comcast would both own stakes in Hulu’s over-the-top service — and AT&T would find itself in direct competition with itself, as it’s launching its own DirecTV Now over-the-top streaming service before the end of the year.
That means Hulu, and competition in the over-the-top (streaming TV) marketplace, is likely to become one of the many issues opponents raise during the merger review process.
by Kate Cox via Consumerist