On demand streaming video service Hulu is upping its subscription game by creating a new service that will stream feeds of popular broadcast and cable TV channels, reports the Wall Street Journal. This move would set it apart from its biggest on demand competitor, Netflix.

Though Hulu has not released details of its plans, the Wall Street Journal says the company is targeting the first quarter of 2017 for launch. Disney-owned channels including ABC, ESPN and the Disney Channel are likely to be a part of the line-up along with the FOX broadcast network, FX and other FOX channels.

Why the new subscription product? It represents a diversification of products to help Hulu remain competitive in an ever-crowded, over-the-top TV marketplace. Cord cutters and cord nevers want options, and they are able to get some broadcast and cable TV channels through other services.

Sling TV, for example, offers a 20+ channel package of live TV channels for $20 a month. That package includes ESPN, TNT, HGTV, TBS and Disney among others. Sling TV is also beta testing a 30+ channel package which includes the Fox channels. PlayStation Vue has recently expanded its offerings with packages ranging from 55 channels to over 100.

For Hulu to keep up with such services, it needs to offer similar options and that includes popular live TV programs and sports. With more than 10 million subscribers, Hulu has a built-in audience to market to, so with the right price point and product mix, Hulu has the opportunity to beef up its bottom line with an additional revenue stream.

Insider Take:

As we’ve said before, the OTT trend isn’t going away. In fact, we see new players joining the marketplace regularly. Originally, those players simply wanted to secure their place in line. Now, however, they are adding to their offerings, thinking beyond what is currently popular, and trying to secure their position for the long haul.

From a strategic point of view, this is smart planning. Companies like Hulu may be able to sustain themselves with current products, but it won’t be able to grow unless it is always looking for the next new thing. For now, that appears to be on demand programming plus live TV…a match made in subscription heaven.

~ Dana E. Neuts, Senior Staff Writer, Subscription Insider