Last week Hulu announced that it has made a deal with CBS to offer live-streaming content to Hulu subscribers, along with CBS Sports Network and POP. Hulu said these networks will be available for live streaming. Much of it will also be available on-demand. The new service, coming later this year, will complement Hulu’s ad-supported and ad-free subscription video-on-demand services, giving it a competitive edge over Netflix who does not currently offer live-streaming.
“To build a successful live TV service, you have to have viewers’ favorite sports and shows — and CBS’ programming is absolutely vital to that mix,” said Mike Hopkins, CEO of Hulu, in the announcement. “With 21st Century Fox, Disney, Turner and now CBS on board, our new live service will offer one of the most valuable sports, news and entertainment lineups anywhere – from ESPN, Fox Sports, CBS Sports and TNT to ABC, CBS, FOX and The Disney Channel.”
According to the Wall Street Journal, CBS will get more than $3 per monthly subscriber with the possibility of a rate above $4 in the future, which is more than it charges cable and satellite TV providers. CBS also has the option to offer premium channel Showtime as an add-on to Hulu subscribers for an extra $8.99 per month. The deal does not, however, include access to CBS’s current season of popular shows. Those are available exclusively through CBS All Access.
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“We are very pleased to make CBS available on Hulu’s new live TV service,” said Ray Hopkins, President, Television Networks Distribution, CBS Corporation. “Hulu has made it clear that it understands the value that the CBS Television Network, along with Showtime and our basic cable network portfolio, will bring to this new offering. In addition, today’s announcement represents another significant step in our strategy to deliver CBS’s industry leading content to viewers whenever and where ever they want to watch it, at terms that are consistent with the Company’s goals.”
Though not all of the details have been released yet, it sounds like Hulu’s new service will be similar to Sling TV, a rival OTT service that offers three bundles ranging from $20 to $40, which include some live streaming. Like the CBS deal, Sling subscribers can add extras to their monthly bundle like a Sports package, kids’ package, comedy plus and lifestyle plus, each for $5 per month.
The writing is on the wall. Traditional pay-TV is no longer the only game in town. With dozens of OTT services now available, consumers are no longer beholden to a cable or satellite TV provider. With a high-speed internet connection, consumers can get most of their favorite programs on services like Netflix, Hulu, Sling TV and CBS All Access without a cable subscription.
This means that pay TV companies need to find ways to keep their subscribers happy. Comcast, for example, is now offering Netflix and Sling TV on its X-1 set-top box. It also means that networks have an opportunity to get in front of new audiences – or to move with their current audiences – to the various video-on-demand services available.
With so much competition now in the OTT space, companies like Hulu and Sling TV are smart to differentiate themselves by offering live-streaming of sports, news and entertainment – which is the only thing missing from those services now. If Hulu and its competitors can provide quality service and a wide range of programming, including live TV, they will develop loyal subscribers who are thrilled with the product while also saving on costly cable bills.