As I discussed in my presentation last week, Hulu is taking the right steps toward becoming one of the first platforms to take all aspects of visual entertainment and put it into one place. It first started with the digital library that was far behind Netflix and even Amazon Prime. However, Hulu has made strong strategic advances in the digital consumption age such as Live TV, adding shows to the library that recently aired, having a could DVR, allowing users to watch sports live, and having add-on premium channels that users can purchase.
The first and most exciting part of Hulu is the Live TV. I know I highlighted it during my presentation, but this is by far the most electric part of Hulu. Live TV incorporates most of the channels that either a Fios, xFinity, or Optimum user would have with basic cable. This is due in part by the ownership from the Walt Disney Company, 21st Century Fox, Comcast, and Timewarner. However, one of the exciting parts is that these four companies offer networks that others (Fios, xFinity, or Optimum) can’t offer all in one place. See below for all the channels that are guaranteed with the $40 subscription.
Furthermore, Hulu tries to consider where the watcher is based. By allowing Hulu to know your zip code, they have access to local news channels, local sports channels, and local entertainment channels. This is the first time a platform has used this geographic location to view local content to become “more involved with the community around them”. Although there are only a few local channels that are included, Hulu stated that it intends to reach out to more networks in the United States to attract more users. For example, I typed in my Brighton zip code and these are the local channels that I could watch live.
The Live TV services are what I believe will make Hulu the next streaming giant and might even take over Netflix. However, there are some confusing parts about the add-ons that Hulu offers. The first is adding premium channels for users to use such as HBO, SHOWTIME, and Cinemax. I still believe this is a very smart move by Hulu to allow users to add this content to the platform for an upcharge, as it consolidates a user’s interaction with streaming platforms. However, there are some confusions as to how the add-on works. Some people already have an HBO/SHOWTIME/Cinemax account with their TV provider. This account would not be able to “transfer” over to Hulu. Therefore, a user would have to cancel the subscription with the cable package, and subscribe to the digital package to pay the $14.99 price, or pay $30 for the double subscription. This seems to be a premium network problem, not a Hulu problem, as the companies outside of Hulu are the ones who won’t allow users to transfer one subscription. I believe this is a strategic move by Hulu to encourage customers to cut that cord from regular cable and move strictly into the streaming market. The only downfall to this move is that both HBO and Cinemax have now also partnered with Amazon Prime to allow users the same deal to stream the premium content. However, SHOWTIME has stayed loyal to Hulu thus far.
The next add-on that Hulu took into account is the DVR feature that people love to take advantage of with normal cable companies. For an additional $15 a month, users can upgrade Cloud DVR to 200 hours. Plus, fast-forward through commercials and enjoy no limit on simultaneous recordings, while being able to stream your recordings anywhere on supported devices. This is another exceptional move by them by adding more potential revenues by enticing customers to cut the cord because of unlimited simultaneous recordings. Most cable companies only allow DVR-ing two programs at once, while also having a small storage for the cable content. Without the add-on, customers may enjoy 50 hours of Cloud DVR storage.
Finally, the last add-on that shows that Hulu is thinking long-term is the unlimited screens add-on. Although this is less of a show stopper as most streaming services have this option, partnering this concept with Live TV targets customers such as families. One family plan that buys these services can allow their kids and the parents to access all the content, along with Live TV once again, all on one platform. There is only one set back with the unlimited screens and that has to do with the premium networks. They have a disclaimer that states “Please note that if you subscribe to one or more Premium Networks, you can only watch each network on 5 screens at the same time. A total of 3 of these screens may be out-of-home mobile devices. Although this is not a huge setback, I picture the company trying to change that aspect in the future, most likely for a higher price.
In the end, Hulu is the up and coming, domineering force in the streaming world. If you love the cult classics like Seinfeld and Always Sunny, this is the platform for you. With add-ons that everyone wants and can tailor their experience to, it really creates an enjoyable platform for one or many.
P.S. There was a question about the international expansion that I didn’t know the answer to in my presentation.
At the time of my presentation, Hulu’s main targets were the United States, Canada, and Mexico. However, Hulu CEO Randy Freer signaled that the company could be interested in expanding internationally through M&A with Turner. Hope that helps!
Let me know if you become a Hulu person due to this. I have some great show suggestions.